China Auto Industry Unveils First Group Standard for Whole-Vehicle Cost Estimation

On July 15, the China Association of Automobile Manufacturers (CAAM) announced the official release of the "Group Standard for Cost Calculation Rules in China's Automotive Industry." Led by CAAM and jointly developed by 18 leading domestic automakers, this is China’s first unified standard for vehicle cost calculation across the entire automotive sector. Addressing long-standing industry issues such as inconsistent cost accounting methodologies and the absence of a standardized benchmark, the standard establishes a calculation model for the cost and expenses of individual vehicle models. It specifies that net revenue must be adjusted by deducting promotional discounts, rebates, and value-added tax (VAT), and incorporates financial interest subsidies, trade-in incentives, and other price-adjustment items into a unified deduction framework. Additionally, it clearly defines the scope of vehicle manufacturing costs, explicitly including transportation fees and warranty-related ("three guarantees") expenses within cost calculations and providing detailed guidance to eliminate discrepancies in how companies classify "costs" versus "expenses." To ensure the authenticity of reported costs, the standard sets minimum requirements: it prohibits artificially lowering costs through related-party transactions or adjustments to accounting estimates, and mandates that internally sourced components be priced no lower than their material costs. Furthermore, it requires enterprises to retain all original supporting documents, contract records, and approval trails throughout the cost calculation process to guarantee traceability and verifiability. While establishing uniform rules, the standard also allows operational flexibility: companies may choose, based on their specific circumstances, whether to include transportation and warranty expenses as part of costs or offset them against revenue. Moreover, reasonable adjustments to abnormal cost items are permitted in special situations—such as seasonal production fluctuations or capacity ramp-up phases for new models—to balance industry-wide comparability with practical business needs.