BEIJING, November 28 (TMTPost)— China’s No.1 electric vehicle (EV) manufacturer BYD Co. Ltd responded to recent news about its major price cuts as the year-end promotion in the whole industry is heating up.

Credit：Visual China

In response to the news about recent promotion,  BYD said the move is not an official round of price cuts but a limited-time offer only for this month, with a aim to facilitate transition from fossil fuel vehicles to EVs, reported the state-run newspaper Shanghai Securities News.

The aforementioned news is that BYD launched a major round of price cuts last Friday. Buyers of multiple models under BYD’s Dynasty series such as Qin, Han, Tang and Song can enjoy the general cash offer ranging from RMB3,000 to RMB10,000, Chinese news media outlet The Paper learned from a dealer in Shanghai. It also learned that purchase of BYD’s Ocean series has not had any price adjustments and maintained the price reduction earlier this month.  

In the beginning of this month, BYD announced a host of promotions from November 1 to 30. During the month, the company will carry out a limited-time cash discount program for customers who place the order and pay the deposit. Under the program, if a customer pay a deposit of RMB2,000 for purchase of Frigate 07, he or she will receive a discount of RMB 20,000, the same amount of deposit for purchase of Dolphin and Seal Champion Edition will have a discount of RMB9,000, and for purchase of Song PLUS Champion Edition and Destroyer 05 Champion Edition Enjoy a discount of RMB7,000. Customers can also enjoy many other promotions such as a zero interest rate car loan for two years.

Hong Kong-lised shares of BYD fell about 5.2% to HK$216.85, the lowest close in a year and a half, after the new price cuts circulated. The shares drop signaled the market didn’t fell optimistic about BYD’s competition advantage since it is squeezed by Tesla and domestic EV startups backed by Huawei in the filed of intelligent vehicles.

The intensified promotion came as automobile companies are racing to achieve their annual sales targets when they enters into year end. BYD set the target of 3 million vehicles this year and has completed around 79.4% of the targeted sales in the first ten months. That suggested BYD has to sell an average of 31,000 units a month in the last two months to meet its goal.

BYD said it sold 301,833 new energy vehicles (NEVs) including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) in October, shattering its sales record for six months in row. That is the first monthly sales topping the 300,000-unit milestone for the Shenzhen-based company. The sales represent a 38.6% year-over-year (YoY) increase and around 5% more than the previous record BYD made in September. From Janaury to October, BYD sold a total of 2.3815 million NEVs, up 70.36% YoY.

At a half-year earnings conference, BYD Chairman and President Wang Chuanfu said his company will wage a price war in the next three to five years, and it is fully prepared for the war, or the battles in the subdivided sectors. Wang added that BYD is confident of winning a higher market share in that three to five-year period. BYD has admitted price reduction has been the key word for the auto market in China. The price compeitition across the whole market will last in the long run, Zhang Zhuo, the general manager of the sales division of BYD Ocean Network, said recently.