Why Are Domestic Cars Cheaper?

[McElla]

Here are the specific reasons for the lower prices of domestic cars: 1. Production costs: Joint-venture cars rely on imported parts for many components, which significantly increases the manufacturing cost of the entire vehicle. In contrast, domestic brands produce and sell locally, allowing for better control over the overall vehicle cost. Additionally, the cost of many features, such as large central control screens, LCD instrument clusters, panoramic sunroofs, and leather seats, is not very high domestically. 2. Core technology: Domestic brands have a certain gap in core technology compared to joint-venture brands. For some key technologies, they still draw inspiration from joint-venture automakers. To reduce costs, some domestic brands may lower their investment in the three major components (engine, chassis, and transmission), opting for less cutting-edge technologies. 3. Tariffs: Imported cars and parts are subject to corresponding tariffs, which naturally increases the price of joint-venture models. Domestic cars, however, mostly use localized parts, making them relatively cheaper. Moreover, some domestic models can also benefit from policy incentives and subsidies.

[Lillian]

I have been in the automotive industry for many years, and the fundamental reason why domestic cars are cheaper is the excellent control over manufacturing costs. Labor costs in China are low, with factory workers earning significantly less than their counterparts abroad. For example, among the component suppliers I work with, the average monthly salary is just a few thousand yuan, while the same position in the U.S. might pay double. Another major factor is localized supply chains—parts manufacturers are located in neighboring provinces, saving a lot on transportation costs and import tariffs. Mass production is also handled skillfully; brands like Geely and BYD produce and sell millions of vehicles annually, spreading out R&D and equipment costs, thereby reducing the average cost per vehicle. The government also provides various subsidies, such as tax exemptions for new energy vehicle purchases, directly lowering the selling price. Maintenance and repairs are also affordable, with parts being readily available and inexpensive domestically, making the overall price very consumer-friendly.

[DelPhoebe]

In my market analysis, I found that the low prices of domestic cars are largely a result of competitive strategies. Domestic brands like Changan and Great Wall deliberately set low prices to attract consumers, especially first-time car buyers with limited budgets, in order to quickly build a user base and establish brand loyalty before gradually introducing premium series. Intense competition also plays a role—with so many options in the market, manufacturers are forced to lower prices for promotions. Additionally, domestic cars focus on practical features, cutting back on flashy high-end configurations like luxury interiors, which naturally reduces costs. But don’t underestimate their quality—safety and reliability are solid, offering great value for money.

[ElenaDella]

I work in technical R&D and understand that the affordability of domestic cars stems from more conservative technology choices. Unlike foreign brands that pursue the latest cutting-edge innovations, we tend to use mature and stable technologies, reducing upfront R&D costs. For example, engine components are made from more cost-effective materials, using less aluminum alloy and more steel, which increases weight but significantly lowers costs. Modular design simplifies the production process, and after localization, components like the battery management system become much cheaper to procure. Additionally, high automation levels in production lines improve efficiency and save time. These savings are reflected in the price, but core performance aspects like range and safety remain uncompromised.