BAIC Motor (01958) saw its stock price plummet by 5.12% in intraday trading on Thursday, as reports emerge of Chinese automakers defying Beijing's call to end intense price competition. The continued discounting practices in the automotive sector are raising concerns about the industry's profitability and long-term sustainability.

According to recent market data, Chinese automakers, including major players like BAIC Motor, are either maintaining, increasing, or even decreasing their discounts in July. This comes despite the Chinese government's explicit request to avoid "rate-race competition" in the sector. The persistent discounting strategy reflects the ongoing challenges faced by automakers, including sluggish consumer sentiment and overcapacity issues.

Industry experts suggest that enforcing competition curbs in China's automotive market could prove challenging. Established companies are facing pressure from new entrants like Xiaomi, while others such as Nio and Xpeng are launching new models to gain market share. This competitive landscape, coupled with the continued price war, is likely contributing to investor concerns about BAIC Motor's future performance and profitability, leading to today's significant stock price decline.