(Yicai) June 7 -- The chairman of Chinese carmaker GAC Group has called on China’s automotive industry to stop the involution brought about by ineffective fierce competition.

Price wars are not sustainable for the automotive industry, as they led many carmakers to lay off staff, Zeng Qinghong said at a forum yesterday. Instead, carmakers should make profits and contribute to society by paying taxes and offering jobs, Zeng noted.

The joint venture between GAC and Japan’s Honda Motor has carried out two rounds of layoffs since the end of last year.

China’s NEV penetration rate was nearly 44 percent in April, according to data from the China Passenger Car Association. Zeng believes that when the NEV penetration rate reaches 50 percent, authorities should treat NEVs the same as fossil fuel-powered cars in terms of government procurement, license issuing, purchase restrictions, and consumer subsidies.

By 2030, 40 percent of cars will be NEVs, 30 percent will be pure EVs, and 30 percent will be fuel cars, Zeng predicted.

GAC’s sales sank 24 percent to 543,011 units in the first four months of the year, with NEVs accounting for only 17 percent of the total.

GAC’s net profit shrank 21 percent to CNY1.2 billion (USD165.7 million) and revenue declined 19 percent to CNY21.4 billion (USD3 billion) in the first quarter of the year from a year earlier.

To cope with the fierce competition, GAC has formed a development outline, aiming to produce and sell over 4.75 million vehicles, generate revenue of CNY1 trillion (USD138.1 billion), and achieve profit and taxes of CNY100 billion (USD13.8 billion) in 2030.

Editor: Futura Costaglione