Price competition is the objective law of market economy, which can eliminate backlogs and return funds. It is also an effective way to stimulate consumption, expand market share, and increase company awareness. However, once this rule is destroyed beyond a certain range, it will What are the consequences?

Tire enterprises recently called for collective price hikes. Due to rising tire costs such as natural rubber, zinc oxide and magnesium, tire companies have to respond to changes in the market. However, it is strange that some tire companies will not only lower their prices in the face of the current situation, but also reduce prices. This also puts some tire companies in embarrassment and is even on the brink of bankruptcy.

As far as the filter industry is concerned, there are more than 1,000 filter companies in China, most of which are self-owned brand small enterprises. Despite the large number, only 30 major producers have been included in the statistics of the entire industry, and there are even fewer companies that have their own brands and improve their sales network. Although the current domestic filter industry market is fiercely competitive, the high-end filter market is basically occupied by joint ventures and foreign-funded enterprises. Liu Wanbin said that in this situation, self-owned brand filter companies should establish a competitive advantage that goes beyond product and price. However, at present, the competition among self-owned brand enterprises of domestic filters is mainly price competition. This competition situation will inevitably jeopardize the development of the entire domestic filter industry and affect the prospects of the filter industry.

The price war has made many fake and shoddy products continue to thrive in the market. Some auto parts companies specialize in selling counterfeit and shoddy products. Because of their low prices, they always have a place to survive in the market, causing tens of thousands of auto parts companies to spring up. Appeared, most of them are small, many in quantity, unbranded, and have low awareness of quality and safety. In addition to the extreme lack of consumer knowledge of automotive parts and components, it was decided to rely on prices to select products. Therefore, many parts and components companies and distributors are driven by profits. To reduce costs, some cheap counterfeit products and sub-factory accessories naturally integrate into the market.

China has become a big automobile country and must bring fierce competition in the auto market. After all, after-sales service is an important market for all businesses, and its merchants all use accessories to cut prices to gain the favor of consumers. Manufacturers in order to improve their own In terms of competitiveness, it has to compress the profits of accessories and lower the price of accessories. Actually, this is only the factory's adjustment to actively respond to changes in the market, and the interest in the game here also puts the stakes in practice. Returned to each other.

The unfavorable market competition in the auto parts industry will occur because companies think that price reduction can increase their market share and profits, without considering that doing so will cause price competition to affect the market as a whole. Unordered price competition will only bring about chaos in the industry. The decline in the image of the industry will not increase market share and profits for a certain company as expected. Regulating market competition is a thorny issue that needs to be solved urgently.

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