'China's auto industry will be seriously threatened': GWM boss thinks Chinese cars are too cheap and said the market is 'unhealthy'

China’s new car market has advanced exponentially over the past few decades, but now GWM’s Chairman has indicated the industry is in an unhealthy state due to incessant price cuts.

As reported by Chinese publication Sina Finance, GWM Chairman Wei Jianjun said the industry already has its own “Evergrande”, referring to the Chinese property developer that faced a multi-billion dollar debt crisis and collapsed amid liquidation.

“If it continues like this, the safety of China’s auto industry will be seriously threatened,” said Mr Wei to Sina Finance in an interview translated to English.

“Now, Evergrande in the automobile industry already exists, but it has not collapsed.”

He didn’t specify any Chinese carmakers in particular, but said some of the “main manufacturers” are focusing too much on pursuing market value and raising their stock prices.

Mr Wei also warned how the excessive and prolonged price war between rival Chinese brands, especially for those selling electric vehicles (EVs), risks cutting corners on safety and reliability.

“Some products have been reduced from 220,000 yuan to 120,000 yuan in the past few years,” said Mr Wei to Sina Finance.

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“What kind of industrial products can be reduced by 100,000 yuan and still have quality assurance? Well this is absolutely impossible.”

Suppliers in particular have been struggling to survive, according to Mr Wei, due to ongoing pressure to lower prices.

Following Mr Wei’s latest comments, shares in BYD, Leapmotor, Nio, Geely have tumbled by up to 9.5 per cent.

In China, BYD recently announced a wide range of subsidies and incentives across a number of its models. Its cheapest model, the Seagull electric hatchback, now starts from 55,800 RMB (~A$12,000).

Geely also announced a range of similar incentives in China to further entice buyers.