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The passenger car industry has already moved away from being a high-profit industry, and while car production and sales recovered in March, sales profit margin was only 4.7%, with some automakers selling vehicles at a loss and facing tremendous pressure, said the China Passenger Car Association.
In particular, with the upcoming implementation of the world’s strictest National Emission Standard VI-B, carmakers are under some psychological pressure to reduce production and lower inventory, resulting in significant losses, it said.
Tesla’s recent price hike is a positive signal, which demonstrates carmakers’ focus on business quality, and will help improve consumer sentiment by lowering expectations for excessive price cuts and let them return to a normal buying pace, it said.