A worker works at an assembly line of Voyah, a Chinese NEV brand, in Wuhan, central China's Hubei Province, April 9, 2025. (Photo: Xinhua)

Multiple Chinese carmakers reported year-on-year growth in their monthly sales in May, as observers emphasized that the industry's healthy development should focus on tackling "involution-style" competition, prioritizing innovation and sustainable growth over price wars and excessive competition.

Chery's car sales hit 205,732 in May, with its new-energy vehicle (NEV) sales standing at 63,169, a surge of 47.7 percent year-on-year, the company said on Monday via its official social media account. 

One day earlier, EV giant BYD announced its sales in May reached 382,476 units, a year-on-year increase of 15.27 percent. In the first five months, the company's total NEV sales amounted to 1,763,369 units, a year-on-year rise of 38.70 percent. 

Other market players also announced their May performance data on the same day. Leapmotor set a new record for deliveries in May, reaching 45,067 units, up 148 percent year-on-year. 

The stable market operation reflects the nation's efforts to tackle "involution-style" competition in the auto sector. The Ministry of Industry and Information Technology (MIIT) on Saturday vowed in an announcement to strengthen oversight and safeguard a fair and orderly market environment for the nation's auto industry, the Xinhua News Agency reported. 

The announcement came after the China Association of Automobile Manufacturers (CAAM) launched an initiative calling on companies to maintain fair competition and foster healthy industry growth. The initiative emphasized that while China's NEV industry has seen rapid growth, with NEVs accounting for more than 40 percent of new car sales, the industry has seen declining profitability recently, largely due to the rise of involution-style competition marked by disorderly price wars.

The CAAM noted that all companies should strictly adhere to the principles of fair competition, while leading enterprises should not seek to squeeze the space of other players for the purpose of gaining a monopoly, it said.

In response, the MIIT voiced support for the initiative and warned that recent disorderly price wars have significantly disrupted normal business operations, endangering the industry's healthy and sustainable development, according to an official with the ministry.

The official emphasized that disorderly price cuts undermine research and development, erode quality and may lead to safety issues, harming consumer rights. Such competition is a classic case of involution, which weakens long-term industry development. "There are no winners in a price war, nor is there any future," the official warned.

Companies often compete for market share through price wars, but long-term industry development relies on strict government policy, regulatory enforcement and industry standards, Wu Shuocheng, a veteran automobile industry analyst, told the Global Times on Monday.

"To tackle future challenges, Chinese automakers must enhance innovation and quality control to stay competitive and ensure healthy industry development," said Wu.