Crackdown on auto sector's hype machine signals a new era

China is making moves to rein in the increasingly chaotic online ecosystem surrounding its auto industry, launching a three-month campaign to curb practices that regulators say distort competition and mislead consumers.

The joint notice, issued last week by six powerful agencies including the Ministry of Industry and Information Technology and the Cyberspace Administration of China, targets illicit profiteering, false promotion and malicious attacks.

The notice came at a time when almost no company has been spared from online attacks, which stem from the rat-race competition to win car buyers but have spawned a cottage industry of marketing firms and paid influencers.

Controversy sells in the age of short videos, so organized online commentators smear rivals or pressure companies for advertising budgets.

Independent "self-media" outlets routinely exploit sales fluctuations or product glitches to generate traffic and extract payments for favorable coverage.

Yet few in the auto sector can claim they have not contributed to such online farces, either by providing so-called "evidence" to influencers or by paying them, said a Beijing-based analyst who asked not to be named.

Some automakers themselves, including Li Auto, have fueled the frenzy, using selective data disclosures or unofficial rankings to stoke online buzz. Underdogs strike back by cherry-picking metrics that show them on top.

Last year's arrival of Xiaomi founder Lei Jun into the car business pushed the trend into overdrive.

His charisma and huge following drew massive attention when the company's first car was unveiled, demonstrating how a tech celebrity could dominate headlines and social feeds.

Other auto executives, including Great Wall Motor founder Wei Jianjun and Changan Chairman Zhu Huarong, rushed to emulate his high-profile style, blurring the line between product marketing and personal branding.

Social media platforms also play their part. Sina Weibo, WeChat Channels and other short-video services work hard to recruit executives, helping to boost their online fame — a temptation few bosses can resist — and to attract product advertising.

Sometimes high-profile executives use social media to stir controversy. In May, a Chery sales executive labeled a Geely car "trash" in a WeChat group. In late July, Li Auto Vice-President Liu Jie accused Nio's Onvo brand on Sina Weibo of hiring car influencers to attack its electric i8, as Onvo's L90 is a potential rival.

Onvo President Shen Fei replied, "Why not call the police?" and demanded an apology when the company was found innocent a day later.

Over the past few years, China's car market has developed a fan-club culture more typical of pop stars than industrial brands.

"It may sound ridiculous, but some people buy Xiaomi cars because Lei's wife was his first love on campus and he donated money to his university," said the Beijing analyst.

Regulators now appear determined to break that cycle. The notice requires automakers to conduct internal inspections and correct violations, while internet platforms must strengthen detection of AI-generated content, provide one-click tools to link rebuttals to disputed posts, and swiftly remove harmful material. Platforms that fail to act could face penalties, heaping pressure on the social-media giants that have profited from the traffic boom.

Voyah Chief Executive Officer Lu Fang called the campaign "timely and necessary", warning that online misconduct "seriously disrupts the healthy development of the auto industry and harms consumers' rights".

Huawei-backed Harmony Intelligent Mobility Alliance said hundreds of accounts linked to MCN agencies have already faced legal action. Great Wall Motor, Zeekr, Changan, Geely and GAC Aion have set up reporting centers to collect evidence of online attacks.

Analysts say the clean-up could raise the cost of fake traffic and push carmakers to compete more on technology and service rather than sensational marketing. But one issue remains unresolved: the line between malicious attacks and legitimate criticism is blurred.

Carmakers often demand that platforms remove videos they dislike — whether true or not — and platforms such as Douyin or WeChat Channels usually comply because they lack the resources to verify content and depend on automakers for advertising revenue.

"In the past, carmakers dealt with negative reports through their public relations departments. Now they handle them through their legal affairs departments," the analyst said.

"The problem is not Douyin or WeChat, which are businesses seeking profit. The problem is that people put their trust in companies instead of non-profit third-party agencies. But it is understandable — such agencies may be fair and just, but they are usually not emotional, and that is not what online surfers want."

It is impossible to solve all the problems at once, but the message from the authorities is clear: After years of explosive growth, price wars and headline-grabbing executives, China's auto industry is being nudged toward a new phase — one where reputations will need to rest on engineering and customer experience rather than fanfare, controversy and viral clicks.