(Yicai Global) July 10 -- The China Association of Automobile Manufacturers removed a clause on abnormal pricing from the letter that 16 carmakers signed last week committing them to maintain market order.

The CAAM expunged the clause about “not disturbing fair competition with abnormal prices” because it breaches China’s antimonopoly law, it said on July 8.

Two days earlier at the China Auto Forum in Shanghai, Tesla, BYD, SAIC Motor, Nio, and 12 other automakers had signed the letter stating that they would refrain from disturbing fair competition with abnormal prices, maintain order in the domestic market to create a good environment for consumers, and use appropriate marketing methods that are neither deceptive nor false.

FAW-Volkswagen Automotive and SAIC Volkswagen Automotive, two joint ventures of Germany’s Volkswagen and China’s FAW Group and SAIC Motor, unveiled new preferential price policies for new energy vehicles on July 6 and 7, respectively. Tesla also introduced new promotions on July 7.

The US electric carmaker sparked the price war in China’s market early this year by sharply cutting prices in the face of weak demand for NEVs. By the end of March, more than 40 brands had also cut prices or were offering purchase subsidies.

Editor: Futura Costaglione