(Yicai) Nov. 27 -- BYD said that annual price negotiations are standard in the automotive industry after China's largest carmaker reportedly requested a 10 percent price cut from its suppliers.

BYD sets price reduction targets for suppliers when making large-scale purchases, but these are negotiable and not mandatory, Li Yunfei, general manager of the Shenzhen-based carmaker's brand and public relations department, said today.

According to a letter reportedly from He Zhiqi, chief operating officer of BYD Passenger Car, circulating on social media earlier today, BYD needs the entire supply chain to jointly and continuously reduce costs to enhance the competitiveness of its passenger vehicles. Therefore, the company asked that suppliers lower their product prices by 10 percent starting Jan. 1.

Another letter circulating on social media expressed strong dissatisfaction and formal protest against BYD's price cut request. It is unacceptable, the unauthored letter stressed.

Shares of BYD [SHE: 002594] closed unchanged at CNY281 (USD38.75) each today, after dropping by as much as 1.4 percent at one point. The broader Shenzhen Component Index rose 2.3 percent.

Editor: Martin Kadiev