(Yicai) Dec. 12 -- With the end of the year not far off, carmakers and auto dealerships in China are stepping up discounts in a last-minute bid to meet their annual sales targets, with at least 16 manufacturers having revealed new price cuts and promotions this month, according to staff at showrooms in Shanghai.

SAIC-Volkswagen, the joint venture of Volkswagen Group and SAIC Motor, has reduced the price of its Teramont sports utility vehicle by as much as CNY58,000 (USD8,100), while electric vehicle startup Xpeng Motors is offering buyers of its P7i executive sedans a discount of up to CNY26,000 (USD3,600).

Besides carmakers, dealerships are also gunning to meet their sales targets. Dealers can sweeten purchase agreements by offering CNY10,000 or more of bonus points and other benefits, a salesperson at EV maker Nio told Yicai.

“Due to the need to achieve both the company's operational goals and the annual sales targets for individual stores, dealerships are under immense pressure, and most are basically selling at a loss,” said a salesperson at a Guangqi Toyota showroom. “It all hinges on who can bear such losses.”

Some carmakers are resorting to other tactics as both Li Auto and Nio have recruited former flight attendants to sell their vehicles, and the maker of the Li Auto One SUV has even hired staff who worked in the luxury goods and high-end hospitality sectors.

Local governments in the country have also introduced policies to encourage car buying. About 10 cities, including Shenzhen, Suzhou, Nanjing, Hefei, and Changchun, have come out with purchase subsidies since last month.

Among the 15 major carmakers monitored by Yicai, Li Auto was the only one to reach its annual sales target before the end of November, and only Geely Automobile Holdings and BYD have the potential to meet theirs this year.

GAC Group, Changan Automobile, and Chery Automobile had each achieved more than 80 percent of their goals as of Nov. 30, while the other nine carmakers lag behind that. For example, Hozon Auto's sales stood at just 41 percent while Seres Group’s were at 37 percent.

The price wars are gnawing away at earnings. In the first three quarters, profits at carmakers in China edged up 0.1 percent to CNY346 billion (USD48.2 billion) on a 10 percent gain in revenues to CNY7.1 trillion (USD989.6 billion), according to data from the statistics bureau. Their profit margins averaged 4.9 percent, lower than the 5.6 percent median for all industries.

Editors: Tang Shihua, Emmi Laine