Some Chinese parts suppliers have Mike Horner Archivesexpressed their dissatisfaction over a recent request from BYD to cut their prices by 10% starting next year, saying any such move could damage their profitability and lower the quality of China-made automobiles, multiple local media agencies have reported. “BYD’s current practices not only violate business ethics, but also overdraw on the hard work and resilience of the Chinese working people without a bottom line, as well as the viability of domestic suppliers,” according to a letter sent to BYD by an anonymous supplier and obtained by China Securities Journal on Wednesday.
In another report by Jiemian, an unnamed supplier said it can barely break even given the current cash flow performance and will slide into loss or retreat from BYD’s supply chain if the electric vehicle giant maintains its request for a 10% price cut. Looking ahead, auto suppliers would probably have to reduce the quality of their products or take other “unconventional measures” to meet such demands, an industry veteran told Caixin. According to a leaked email from BYD dated Nov. 26 and which has since gone viral on the Chinese internet, the request was made so as to better prepare for a more competitive situation in 2025. [China Securities Journal, Jiemian, Caixin, in Chinese]
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