BAIC Motor (HKG:1958) saw its stock price plummet 5.12% during the intraday trading session on Thursday, as investors reacted to news that Chinese automakers are continuing their aggressive pricing strategies despite government calls to end cutthroat competition.

According to a Bloomberg News report, Chinese car manufacturers, including BAIC Motor, are defying Beijing's directive to stop intense price competition. The report indicates that automakers are either maintaining, increasing, or even decreasing discounts in July, compared to the same period last year. This ongoing price war is likely putting pressure on BAIC Motor's profit margins, leading to the sharp decline in its stock price.

The continued discounting comes as Chinese automakers grapple with sluggish consumer sentiment and overcapacity issues. BAIC Motor, as one of China's biggest local automakers, faces additional challenges from the entry of new players like Xiaomi into the automotive market and the release of new models by competitors such as Nio and Xpeng. This intensifying competition in an already crowded market appears to be weighing heavily on investor sentiment towards BAIC Motor, contributing to today's significant stock price drop.