Car dealers are starting to offer aggressive deals in an effort to halt a decline in sales, brought about largely by Auto China 2010 and an increasing stockpile.
Wang Ye, sales manager of Subaru in Yayuncun auto market, said the May Day holidays should have been a peak for sales, but many potential customers were drawn to the show, which ended on Sunday and drew 785,000 people in its 10 days.
"Since the show opened, customers coming to see our cars have dropped by at least 30 percent," Wang said.
As well, increasing stocks are causing problems for manufacturers and dealers.
Thanks to the large increase in the auto market last year, many Chinese automakers have increased production.
The domestic carmaker BYD set a sales target of 800,000 for this year, but sales last year reached only 400,000, Du Guozhong, public relations manager of the company.
The China Association of Automobile Manufacturers said that at the end of March, domestic manufacturers had a stockpile of 530,000 units.
Dealers are meanwhile trying everything to entice buyers with freebies such as accessories and insurance and even offering to pay the purchase tax.
"These offers were never on the cards when things were good," Zhang Hauiqing, a Chery salesman said.
Shi Guangchao, a Citroen salesman, said his company has been offering windshield films worth 4,000 yuan as the factory will not allow it to offer discounts.
Yao Gaungli, general manager of Dongfeng Liuzhou sales company, said due to the increased output of manufacturers and more than 100 new or revised models coming in, a new price war is unavoidable.
Yang Fanxin, a Kia salesman, said Kia will produce new types of SUVs in China, and many potential customers will want to wait to see if they will be better.
Zhao Lei, deputy secretary of China Automobile Dealers Association, said factors that led to the growth in auto market last year are no longer in play.
"I am sure that a blowout that happened in 2009 won't happen this year," Zhao said.
Guo Yong, director of the Yayuncun Auto Market, said if manufacturers continue to increase production, dealers will have to cut prices - and that will have a negative impact on the brand.
"My observation is the auto market will soon be coming to an off-season," Guo said.