Last month, the National Development and Reform Commission launched a series of anti-monopoly investigations on the pricing guidelines of multinational auto companies.
Some people will conclude that China's central economic decision-making body is doing this to protect domestic independent brand car companies.
But this impression is wrong. In fact, antitrust investigations are likely to put pressure on the survival of independent brands, not to protect them.
As the investigation progressed, multinational automakers began to reduce the price of spare parts for their products, while other companies that were not investigated also followed suit.
In this way, the cost of the car owner will be reduced, which is good news for domestic car owners. But for self-owned brand car companies, these are not good news, because this will weaken their only advantage: low prices.
Self-owned brand cars are affected by poor brand image and old technology, and can only rely on low prices to survive and develop.
In recent years, independent brand car companies have been striving to upgrade their products, while multinational competitors have begun to introduce cheaper models to compete for market share. Although the price gap is shrinking, there is still room for survival.
At present, the price of self-owned brands is generally less than 80,000 yuan (12,900 US dollars), while the price of most multinational auto companies is more than 100,000 yuan.
This price difference allows independent brand car companies to rely on small profits to survive.
But now the NDRC has forced multinational brands to reduce the price of spare parts. The price gap between the two has been squeezed, and the living space of independent brand car companies will be compressed.