SAIC’s Maxus, BYD pushing for supplier price cut...Pony AI fetches $5.25bn in IPO...China industrial profits down in October

SAIC’s Maxus, BYD pushing for supplier price cut

SAIC Motor Corp.’s Maxus brand has joined market leader BYD Co. in seeking a 10% price cut from suppliers, another sign China’s auto price war will continue into next year, reports Bloomberg. Maxus, which sells electric and gasoline cars, told suppliers it required savings to “improve the ability to survive under the pressure of complex situations, with the goal of reducing costs by 10%,” according to a report in the China Securities Journal.

The push to cut component costs comes amid a broader price war for gasoline and EV brands that threatens the survival of smaller, sub-scale players against the biggest manufacturers like BYD and Geely Automotive Holdings Ltd.

BYD is also seeking 10% savings from suppliers from the start of next year, despite its growing profit margins, in a sign the market leader is bolstering its finances to further lower prices. A BYD executive separately defended the company, saying its request to suppliers was common in the auto industry, and the 10% demand wasn’t mandatory.

Pony AI fetches $5.25bn in IPO

Shares of Pony AI opened about 15% above their offer price in their market debut on Wednesday, giving the robotaxi company a valuation of $5.25 billion, in an indication of a positive investor approach to China-based firms, reports Reuters. The company's depositary shares opened at $15 in their Nasdaq debut, compared with the IPO price of $13.

The IPO comes after nearly two years of uncertainty sparked by Didi Global's delisting, which was followed by a long-standing audit dispute between Beijing and the US that was eventually resolved in December 2022.

Pony AI Chief Executive Officer James Peng said President-elect Donald Trump's return to the White House did not influence the timing of the listing. "This listing (had) already been in preparation for some time," Peng told Reuters. "In terms of the potential impact from Trump … we have dealt with this kind of policy change all the time; it is nothing new. I think we are fully prepared."

China industrial profits down in October

China’s large industrial firms reported a steep decline in profit for October—particularly among those linked to the property and retail sectors—with more pressure expected from tariff hikes after US president-elect Donald Trump takes office, reports the South China Morning Post. Their combined profits went down by 10% year on year last month, the National Bureau of Statistics in Beijing said on Wednesday. The total for January through October fell 4.3% from the same period last year to RMB 5.87 trillion ($810.9 billion), worse than the 3.5% drop recorded in the first nine months.

A loss of RMB 23.3 billion was reported for steel firms in the first 10 months, while the “petroleum, coal and other fuels” enterprises shed RMB 37.7 billion in profits. In the non-metallic minerals sector, profits tumbled 49.6% in the same period.

State-controlled industrial firms reported a fall of 8.2% to RMB 1.85 trillion, while major enterprises from foreign territories as well as Hong Kong, Macau and Taiwan posted RMB 1.46 trillion in combined profits over the first 10 months, up 0.9% over the same period in 2023.

Former Sequoia Capital China unit looks to global deals

Sequoia Capital’s former China unit has accelerated its push for global deals, investing in celebrity-backed start-ups such as Kylie Jenner’s Vodka seltzer company, as it struggles to deploy its $9 billion cash pile in a sluggish domestic market and tightening US controls, reports the Financial Times. HongShan, which split off last year from one of the world’s largest venture capital firms amid rising geopolitical tensions, has ratcheted up its hunt for deals in Europe and North Asia after facing shrinking options in China.

The Chinese investment group has done deals with celebrity-backed consumer groups such as Jenner’s Sprinter, one of the US reality TV star’s newest business ventures, as well as French women’s fashion brand Destree, co-founded by Géraldine Guyot, the wife of LVMH founder’s son Alexandre Arnault, according to multiple people familiar with the matter.

The global push comes as HongShan, led by billionaire Neil Shen, widely considered China’s top tech investor, has faced frustration from some limited partners over the pace of dealmaking for its $9 billion US fund, after raising the money two years ago.

China emissions peak may be in sight

Experts are split on whether China’s carbon dioxide emissions will have peaked by next year, even as cautious optimism builds about Beijing’s environmental progress, reports the Financial Times. A survey of 33 domestic and 11 international experts found 44% expected the emissions from the world’s biggest polluter had either peaked already or will peak by 2025, more than double the 21% in 2023 who responded positively, and up from just 15% in 2022.

The report from the Centre for Research on Energy and Clean Air (Crea) reflects just how far China’s boom in green energy and electric vehicles this year has exceeded expectations, even after “explosive” growth in 2023. More than half of new cars sold were electric for three months in a row in 2024. At the same time, the heavily polluting building industry has gone into decline.

Since February this year, a slight decline in emissions had relied partly on the recovery of hydropower generation following droughts, the report said, noting that emissions had “stabilised” but were not in structural decline.

Car trouble

Both BYD and SAIC Motor Corp’s Maxus brand are seeking a 10% price cut from suppliers, signalling the price war in China’s auto industry is biting hard. BYD’s profit margins have been growing, but this move appears to indicate the company is preparing to further cut prices to squeeze out smaller manufacturers.

China’s auto industry is a bright spot in the country’s economy—it just became the world’s top auto exporter—but it also faces massive overcapacity issues and associated financial pressures, which may well worsen if exports are limited as a result of more tariffs. Following the announcement of a 10% year-on-year drop in industrial profits in October, a 10% squeeze on suppliers is going to put even more pressure on smaller companies.