China: Interpretation of the Compliance Guidelines on Pricing Conduct in the Automotive Industry (Draft for Comment)
Published 18 December 2025
Sarah Xuan
On December 12, 2025, the State Administration for Market Regulation (hereinafter referred to as “SAMR”) released the Compliance Guidelines on Pricing Conduct in the Automotive Industry (Draft for Comment), soliciting public opinions. The deadline for submitting feedback is December 22, 2025. The direct focus of this Guidelines is, against the backdrop of intensifying competition in the automotive industry and increasingly complex pricing strategies, to further regulate pricing conduct in the automotive sector through more “operable” compliance guidance, maintain market price order and fair competition, protect the lawful rights and interests of consumers and business operators, and guide enterprises in establishing pricing compliance systems so as to promote the industry’s high-quality development.It should be emphasized that, as a compliance guideline, the Guidelines do not directly establish new types or levels of administrative penalties. Their value lies, on the one hand, in transforming the relatively principle-based requirements under the Price Law and its supporting regulations into a “list of risk points” tailored to scenarios across the automotive industry chain; and, on the other hand, in repeatedly using expressions such as “posing significant legal risks” and “posing relatively high legal risks” to convey clear enforcement priorities to the market.
This article will introduce the main contents of the Guidelines one by one.
I. General Provisions Chapter I of the Guidelines (Articles 1–5) clarifies that all pricing conduct arising from automobile manufacturing and new vehicle sales activities conducted within the territory of China falls within their scope of regulation. This means that pricing issues will be elevated from “case-by-case violations” (such as a single instance of false promotion) to a systemic governance issue concerning “market order and fair competition”. Accordingly, when regulators assess in the future whether a particular pricing conduct “disrupts market order”, they will conduct an overall evaluation based on industry impact, public opinion, and transmission effects along the industry chain, rather than considering a single transaction in isolation.
II. Regulation of Manufacturing Enterprises Chapter II of the Guidelines (Articles 6–13) imposes requirements with stronger industry-chain characteristics on vehicle manufacturers and parts suppliers, which can be summarized along three main Points. The first point is “full value-chain pricing conduct management”. The Guidelines require manufacturing enterprises to establish pricing strategies that are cost-based and demand-oriented, and to incorporate vehicle sales, financial services, and other segments into full value-chain management. For large automotive manufacturers, this means that pricing compliance is no longer limited to list prices and promotional statements at the sales end, but also extends to whether combined measures—such as rebates, financial interest subsidies, trade-in incentives, and bundled ecosystem services—may distort the expression of the actual transaction price or form structural arrangements designed to circumvent regulatory oversight. For parts suppliers, this requires retaining an evidentiary chain substantiating the “legitimate reasons” for price increases amid supply chain fluctuations, so as to avoid being deemed to have raised prices substantially without justification and thereby disrupted market order.
The second point is “rebates and dealers’ independent pricing rights”. The Guidelines require rebate policies to be clear and explicit and to be agreed upon in advance through contractual arrangements, while emphasizing respect for dealers’ independent pricing rights and adherence to fair trading and equal consultation in cooperation. In practice, if rebate terms, assessment metrics, payout conditions, or retroactive adjustment mechanisms lack transparency, this can not only easily trigger disputes with dealers, but may also, from a regulatory perspective, evolve into tools for “disguised price control” or for inducing or misleading counterparties in transactions. Therefore, manufacturing enterprises must be particularly vigilant against forming de facto price constraints through mechanisms such as “completion of a certain guided price system”, “prices shall not fall below a specified level”, or “rebates will be deducted if prices are lowered”, because even if such arrangements do not explicitly state “uniform resale prices”, they may still be assessed as improper interference with downstream pricing and trigger higher-level competition compliance risks.
The third point is “explicit identification of high-risk conduct”, particularly price collusion and predatory pricing.Article 9 of the Guidelines uses an enumerative approach to indicate that price collusion among vehicle manufacturers or among parts suppliers—such as fixing prices, fixing the range of price increases or decreases, or adopting uniform pricing standards—“poses significant legal risks”. Article 10 further refines below-cost sales “for the purpose of excluding competitors or monopolizing the market”, detailing various disguised forms such as discounts and subsidies, debt settlement in kind, shipping excess goods with under-invoicing, and artificially lowering bid prices in tendering processes, and provides explanations of “production costs” and “ex-factory prices”. The institutional signal here is very clear: regulatory scrutiny is no longer limited to the outcome-based question of “whether prices are low”, but instead penetrates transaction structures, invoicing arrangements, and commercial terms to identify whether the “actual ex-factory price / actual transaction price is below cost” and whether there exists an intent to exclude or restrict competition. Against the backdrop of price wars, if enterprises seek to justify their conduct on grounds such as “inventory clearance” or “promotional pricing during new product introduction”, they must all the more establish traceable compliance records covering promotional objectives, scope, duration, cost calculations, and approval processes; otherwise, they will be placed in a highly disadvantageous position when faced with penetrating reviews of “below-cost” pricing. In addition, Article 13, which concerns charging standards for “paid unlocking” functions, deserves particular attention. The Guidelines require that for functions with a free trial period, the duration and subsequent charging standards must be disclosed, calculated from the delivery date, and reminded again before the free period expires; for differentiated value-added functions that require payment, clear disclosure must be made at the time of sale, and no charges may be imposed if disclosure is not explicit. This provision directly brings charging practices for in-vehicle software, subscription services, and pre-installed hardware functions within the scope of pricing compliance. For enterprises, the information presented in configuration sheets, contract clauses, app prompts, and delivery confirmations must be consistent; any disclosure gap at any stage may transform a commercial strategy issue into a highly sensitive matter combining regulatory risk and consumer disputes.
III. Regulation of Sales Enterprises and Platforms Chapter III of the Guidelines (Articles 14–21) focuses on the areas of new vehicle sales that most commonly give rise to complaints: price labeling, promotions, giveaways, price fraud, predatory low pricing, and service charges, and provides more detailed provisions on the governance responsibilities of platform operators. First, the requirements for clearly marked prices are significantly refined. Article 14 not only requires that vehicle names, sales prices, model configurations, and prices of optional accessories be prominently displayed at business premises, but also emphasizes that the “sales price” refers to the price independently set by the sales enterprise rather than the manufacturer’s suggested retail price. It further requires that where vehicles cannot be delivered on-site, the delivery time must be disclosed prior to the transaction, and sets out requirements for online sales display methods as well as information on delivery and transportation fees.Second, promotions and price-external giveaways are subject to stricter “verifiability” requirements. Article 15 requires prominent disclosure of promotional rules, duration and scope, and the truthful identification of the basis for price reductions or discounts, and mandates disclosure of calculation methods for points, vouchers, gift certificates, and prepayment offsets; Article 16 sets expectations for disclosure of the names and quantities of gifts, the number of service items or service instances, and the value of such giveaways under the principle of “disclose wherever possible”. For sales enterprises, the key issue in promotional activities is upgraded from “whether rules are written” to “whether the rules can be calculated, fulfilled, and reviewed ex post”. In particular, the basis for determining comparison prices and the formation and retention of corresponding evidentiary materials will directly affect the assessment of the authenticity and legality of promotions, and will become key review factors in administrative enforcement and dispute resolution. Third, Article 17 provides scenario-based listings of common forms of price fraud, including misleading price labeling, false comparison prices such as fictitious “market prices” or “manufacturer’s suggested prices”, false “limited-time discounts” or “clearance prices”, imposing loans or insurance as transaction conditions without prior disclosure, refusal to honor price commitments, advertising low prices without inventory, and refusal to offset payments as agreed. The regulatory implication is that pricing violations often involve “structural information misrepresentation”—for example, hiding financing, insurance, registration, or decoration conditions behind a quoted price, thereby preventing consumers from obtaining the true “attainable transaction price” at key decision points. Accordingly, enterprises should front-load and formalize disclosure of the “total transaction price and its components”, and ensure consistency across sales scripts, promotional posters, online pages, and contract clauses. In addition, Article 18 similarly refines various disguised forms of predatory pricing on the sales side involving prices “below purchase cost”, with regulators paying closer attention to whether the “actual sales price”, after penetration through discounts, subsidies, bulk incentives, or invoicing arrangements, falls below purchase cost, and assessing risks in conjunction with the underlying purpose.Finally, Articles 19 and 20 further strengthen the responsibilities of platform operators. Platforms are required to respect the independent pricing rights of operators within the platform, and must not impose unreasonable restrictions or attach unreasonable conditions, nor force or indirectly force participation in promotions; where platforms organize promotions while knowing or having reason to know of pricing violations, they must take measures such as warnings, suspension, or termination of services and retain relevant records; during regulatory investigations, platforms must provide data, technical support, and assistance. At the same time, the Guidelines also encourage platforms, where prices within the platform are “significantly lower than the manufacturer’s suggested price or market level”, to remind operators to conduct business in a lawful and reasonable manner and to alert consumers to abnormal transaction risks.
IV. Establishing Internal Pricing Compliance Management Mechanisms Chapter IV of the Guidelines (Articles 22–25) explicitly encourages enterprises to establish internal pricing compliance management mechanisms. It proposes six core mechanisms: pricing decision-making, sales contract management, internal supervision, emergency response, risk prevention and control, and compliance training. It also requires enterprises to clearly define responsible entities and allocation of authority across stages such as marketing promotion, pricing decisions, and sales execution, and to revise systems in a timely manner in response to changes in laws and policies. This institutional-level requirement provides regulators with a new inspection pathway, whereby authorities will examine not only whether enterprises have violated the law, but also whether they possess the capacity for compliance governance.
Comment The provisions of the Compliance Guidelines on Pricing Conduct in the Automotive Industry (Draft for Public Comment) are not intended to negate market competition, nor do they simply require enterprises “not to lower prices”. Rather, they seek to delineate the legal boundaries of price competition: where competition can be won through efficiency, products, and services, prices should be truthful and transparent, with clear and verifiable rules; where conduct may distort market order, infringe consumers’ right to know, or exclude competition through improper means, clear warnings are issued in the form of “significant / relatively high legal risks”.For enterprises across the automotive industry chain, this draft for public comment should serve as a reference point for gradually conducting a systematic review of rebate policies, promotional standards, disclosure of total transaction prices, service fee items, cost calculations and approval records for low-price strategies, as well as platform activity rules and risk control mechanisms, in order to adapt to the forthcoming regulatory upgrade.
I. General Provisions Chapter I of the Guidelines (Articles 1–5) clarifies that all pricing conduct arising from automobile manufacturing and new vehicle sales activities conducted within the territory of China falls within their scope of regulation. This means that pricing issues will be elevated from “case-by-case violations” (such as a single instance of false promotion) to a systemic governance issue concerning “market order and fair competition”. Accordingly, when regulators assess in the future whether a particular pricing conduct “disrupts market order”, they will conduct an overall evaluation based on industry impact, public opinion, and transmission effects along the industry chain, rather than considering a single transaction in isolation.
II. Regulation of Manufacturing Enterprises Chapter II of the Guidelines (Articles 6–13) imposes requirements with stronger industry-chain characteristics on vehicle manufacturers and parts suppliers, which can be summarized along three main Points. The first point is “full value-chain pricing conduct management”. The Guidelines require manufacturing enterprises to establish pricing strategies that are cost-based and demand-oriented, and to incorporate vehicle sales, financial services, and other segments into full value-chain management. For large automotive manufacturers, this means that pricing compliance is no longer limited to list prices and promotional statements at the sales end, but also extends to whether combined measures—such as rebates, financial interest subsidies, trade-in incentives, and bundled ecosystem services—may distort the expression of the actual transaction price or form structural arrangements designed to circumvent regulatory oversight. For parts suppliers, this requires retaining an evidentiary chain substantiating the “legitimate reasons” for price increases amid supply chain fluctuations, so as to avoid being deemed to have raised prices substantially without justification and thereby disrupted market order.
The second point is “rebates and dealers’ independent pricing rights”. The Guidelines require rebate policies to be clear and explicit and to be agreed upon in advance through contractual arrangements, while emphasizing respect for dealers’ independent pricing rights and adherence to fair trading and equal consultation in cooperation. In practice, if rebate terms, assessment metrics, payout conditions, or retroactive adjustment mechanisms lack transparency, this can not only easily trigger disputes with dealers, but may also, from a regulatory perspective, evolve into tools for “disguised price control” or for inducing or misleading counterparties in transactions. Therefore, manufacturing enterprises must be particularly vigilant against forming de facto price constraints through mechanisms such as “completion of a certain guided price system”, “prices shall not fall below a specified level”, or “rebates will be deducted if prices are lowered”, because even if such arrangements do not explicitly state “uniform resale prices”, they may still be assessed as improper interference with downstream pricing and trigger higher-level competition compliance risks.
The third point is “explicit identification of high-risk conduct”, particularly price collusion and predatory pricing.Article 9 of the Guidelines uses an enumerative approach to indicate that price collusion among vehicle manufacturers or among parts suppliers—such as fixing prices, fixing the range of price increases or decreases, or adopting uniform pricing standards—“poses significant legal risks”. Article 10 further refines below-cost sales “for the purpose of excluding competitors or monopolizing the market”, detailing various disguised forms such as discounts and subsidies, debt settlement in kind, shipping excess goods with under-invoicing, and artificially lowering bid prices in tendering processes, and provides explanations of “production costs” and “ex-factory prices”. The institutional signal here is very clear: regulatory scrutiny is no longer limited to the outcome-based question of “whether prices are low”, but instead penetrates transaction structures, invoicing arrangements, and commercial terms to identify whether the “actual ex-factory price / actual transaction price is below cost” and whether there exists an intent to exclude or restrict competition. Against the backdrop of price wars, if enterprises seek to justify their conduct on grounds such as “inventory clearance” or “promotional pricing during new product introduction”, they must all the more establish traceable compliance records covering promotional objectives, scope, duration, cost calculations, and approval processes; otherwise, they will be placed in a highly disadvantageous position when faced with penetrating reviews of “below-cost” pricing. In addition, Article 13, which concerns charging standards for “paid unlocking” functions, deserves particular attention. The Guidelines require that for functions with a free trial period, the duration and subsequent charging standards must be disclosed, calculated from the delivery date, and reminded again before the free period expires; for differentiated value-added functions that require payment, clear disclosure must be made at the time of sale, and no charges may be imposed if disclosure is not explicit. This provision directly brings charging practices for in-vehicle software, subscription services, and pre-installed hardware functions within the scope of pricing compliance. For enterprises, the information presented in configuration sheets, contract clauses, app prompts, and delivery confirmations must be consistent; any disclosure gap at any stage may transform a commercial strategy issue into a highly sensitive matter combining regulatory risk and consumer disputes.
III. Regulation of Sales Enterprises and Platforms Chapter III of the Guidelines (Articles 14–21) focuses on the areas of new vehicle sales that most commonly give rise to complaints: price labeling, promotions, giveaways, price fraud, predatory low pricing, and service charges, and provides more detailed provisions on the governance responsibilities of platform operators. First, the requirements for clearly marked prices are significantly refined. Article 14 not only requires that vehicle names, sales prices, model configurations, and prices of optional accessories be prominently displayed at business premises, but also emphasizes that the “sales price” refers to the price independently set by the sales enterprise rather than the manufacturer’s suggested retail price. It further requires that where vehicles cannot be delivered on-site, the delivery time must be disclosed prior to the transaction, and sets out requirements for online sales display methods as well as information on delivery and transportation fees.Second, promotions and price-external giveaways are subject to stricter “verifiability” requirements. Article 15 requires prominent disclosure of promotional rules, duration and scope, and the truthful identification of the basis for price reductions or discounts, and mandates disclosure of calculation methods for points, vouchers, gift certificates, and prepayment offsets; Article 16 sets expectations for disclosure of the names and quantities of gifts, the number of service items or service instances, and the value of such giveaways under the principle of “disclose wherever possible”. For sales enterprises, the key issue in promotional activities is upgraded from “whether rules are written” to “whether the rules can be calculated, fulfilled, and reviewed ex post”. In particular, the basis for determining comparison prices and the formation and retention of corresponding evidentiary materials will directly affect the assessment of the authenticity and legality of promotions, and will become key review factors in administrative enforcement and dispute resolution. Third, Article 17 provides scenario-based listings of common forms of price fraud, including misleading price labeling, false comparison prices such as fictitious “market prices” or “manufacturer’s suggested prices”, false “limited-time discounts” or “clearance prices”, imposing loans or insurance as transaction conditions without prior disclosure, refusal to honor price commitments, advertising low prices without inventory, and refusal to offset payments as agreed. The regulatory implication is that pricing violations often involve “structural information misrepresentation”—for example, hiding financing, insurance, registration, or decoration conditions behind a quoted price, thereby preventing consumers from obtaining the true “attainable transaction price” at key decision points. Accordingly, enterprises should front-load and formalize disclosure of the “total transaction price and its components”, and ensure consistency across sales scripts, promotional posters, online pages, and contract clauses. In addition, Article 18 similarly refines various disguised forms of predatory pricing on the sales side involving prices “below purchase cost”, with regulators paying closer attention to whether the “actual sales price”, after penetration through discounts, subsidies, bulk incentives, or invoicing arrangements, falls below purchase cost, and assessing risks in conjunction with the underlying purpose.Finally, Articles 19 and 20 further strengthen the responsibilities of platform operators. Platforms are required to respect the independent pricing rights of operators within the platform, and must not impose unreasonable restrictions or attach unreasonable conditions, nor force or indirectly force participation in promotions; where platforms organize promotions while knowing or having reason to know of pricing violations, they must take measures such as warnings, suspension, or termination of services and retain relevant records; during regulatory investigations, platforms must provide data, technical support, and assistance. At the same time, the Guidelines also encourage platforms, where prices within the platform are “significantly lower than the manufacturer’s suggested price or market level”, to remind operators to conduct business in a lawful and reasonable manner and to alert consumers to abnormal transaction risks.
IV. Establishing Internal Pricing Compliance Management Mechanisms Chapter IV of the Guidelines (Articles 22–25) explicitly encourages enterprises to establish internal pricing compliance management mechanisms. It proposes six core mechanisms: pricing decision-making, sales contract management, internal supervision, emergency response, risk prevention and control, and compliance training. It also requires enterprises to clearly define responsible entities and allocation of authority across stages such as marketing promotion, pricing decisions, and sales execution, and to revise systems in a timely manner in response to changes in laws and policies. This institutional-level requirement provides regulators with a new inspection pathway, whereby authorities will examine not only whether enterprises have violated the law, but also whether they possess the capacity for compliance governance.
Comment The provisions of the Compliance Guidelines on Pricing Conduct in the Automotive Industry (Draft for Public Comment) are not intended to negate market competition, nor do they simply require enterprises “not to lower prices”. Rather, they seek to delineate the legal boundaries of price competition: where competition can be won through efficiency, products, and services, prices should be truthful and transparent, with clear and verifiable rules; where conduct may distort market order, infringe consumers’ right to know, or exclude competition through improper means, clear warnings are issued in the form of “significant / relatively high legal risks”.For enterprises across the automotive industry chain, this draft for public comment should serve as a reference point for gradually conducting a systematic review of rebate policies, promotional standards, disclosure of total transaction prices, service fee items, cost calculations and approval records for low-price strategies, as well as platform activity rules and risk control mechanisms, in order to adapt to the forthcoming regulatory upgrade.