Great Wall Motor (GWMOTOR) saw its stock price plummet by 5.99% during Monday's trading session, as Chinese auto stocks faced a significant sell-off. The decline came in the wake of industry leader BYD's announcement of sweeping price cuts across its electric and hybrid vehicle lineup, sparking fears of intensifying competition in the sector.

The stock's sharp drop was part of a broader trend affecting Chinese vehicle manufacturers. BYD, China's top-selling car brand, initiated price reductions of up to 34% on 22 of its models, a move that sent shockwaves through the industry. This aggressive pricing strategy has reignited concerns about a potential price war in the world's largest automotive market, putting pressure on competitors like Great Wall Motor to potentially follow suit or risk losing market share.

The auto industry's challenges extend beyond price competition. Despite electric vehicle sales reaching new annual highs, growth has been decelerating. Dealerships are grappling with high inventory levels, which reached 3.5 million cars or 57 inventory days in April, the highest since December 2023. These factors, combined with China's broader economic slowdown, have created a challenging environment for automakers like Great Wall Motor, leading to increased investor caution and the subsequent stock price decline.