China’s market regulator released new draft guidelines aimed at stopping automakers from pricing models too cheaply as part of efforts to curb cutthroat competition that’s fueling deflationary pressure.

The new rules set price-compliance requirements for vehicle and parts production to pricing strategy and sales practices, according to the draft released by the State Administration for Market Regulation on Friday. Automakers will face “significant legal risks” if they set sale prices below production costs to exclude competitors or monopolize the market, it said.

See Full Page