Lufang, Chairman of Voyah, Says Car Price Hikes Likely, Urges Buyers to Purchase Soon

During the 17th Annual Meeting of the New Champions of the World Economic Forum held in Dalian on June 24, Lu Fang, Chairman and Party Secretary of Voyah Auto, stated that vehicle price increases are highly likely due to rising raw material costs. He noted that prices of key raw materials—including memory chips, batteries, petrochemical products, aluminum, and steel—have risen broadly, making it extremely difficult for automakers to maintain current pricing levels. Lu emphasized that automobiles, as long-life-cycle products, require ongoing service support that incurs additional costs, and neither companies nor consumers should expect sustained operations at negative gross margins. He argued that under these circumstances, further price cuts would be illogical, and companies are instead addressing cost pressures through internal efficiency improvements and cost optimization. Lu also mentioned that premium models have some capacity to absorb cost increases, whereas entry-level vehicles—with their limited profit margins—may face production cuts or even market exit. He advised consumers to purchase vehicles sooner rather than later. Earlier this year, several other automotive executives expressed similar views: Li Bin, founder of NIO, highlighted the significant pressure caused by rising memory chip prices, noting that although these costs have not yet been passed on to consumers, he urged buyers to act quickly. He Xiaopeng, Chairman of XPeng Motors, likewise stated that persistent raw material price hikes continue to impact the auto industry heavily; while the company has mitigated some pressure through in-house R&D and innovation, most of its earnings are still being used to cover rising supply chain costs.