Geely Automobile (HKG:0175) will stop building new plants amid a worsening global overcapacity, chairman Li Shufu said at the Chongqing Auto Show, the South China Morning Post reported Monday.

Instead, the carmaker will focus on enhancing its technological capabilities and expanding globally, the report said.

The move comes as Chinese automakers grapple with a fierce price war. Geely Auto, BYD (HKG:1211, SHE:002594), and Leapmotor (HKG:9863) slashed prices on 70 models by up to 20% in late May to defend market share, SCMP said.

Li noted that global excess capacity could be leveraged as part of the company's "friendly" globalization strategy, SCMP reported. In February, Geely said it planned to use Renault's plant in Brazil to support its overseas expansion, the report added.

SCMP cited analysts saying Geely Auto's move to halt new plant construction could prompt peers to follow suit, helping ease inventory pressures across the sector.

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