BEIJING, Nov 27 (Reuters) -

Chinese automaker BYD is asking its suppliers to

cut their prices, in a sign that a brutal price war in the

world's largest auto market is set to escalate.

Citing a leaked email dated Nov. 26 from BYD, Chinese

digital news outlet thepaper.cn reported on Wednesday that the

Chinese electric vehicle giant had asked one unidentified

supplier to reduce its prices by 10% from Jan. 1.

Reuters was unable to verify the email, screenshots of

which were widely shared on social media. BYD did not respond to

a request for comment.

However, a BYD executive on Wednesday said on his Weibo

account that the Chinese automaker sets price reduction targets

for suppliers when making large-scale purchases. These were

negotiable and not mandatory, he added.

"Annual price negotiations with suppliers are a common

practice in the automotive industry," BYD's Brand and Public

Relations Department general manager Li Yunfei said in his post.

He did not refer to the leaked email.

BYD has become a relentless discounter in the price war that

Tesla started in the world's largest auto market last

year. That aggressive stance has helped it unseat its U.S. rival

as the world's biggest seller of electric vehicles, even though

most of BYD's cars are sold in China.

BYD topped China's auto sales rankings with a 15.8% share of

the overall market in the first nine months, while its sales of

EVs and plug-in hybrids accounted for more than a third of the

country's total, industry data showed.

BYD was second only to the combined sales of VW's two

joint ventures in China last year.

A separate news report by the China Securities Journal

newspaper published on Wednesday said that SAIC Motor's Maxus

unit had also sent a letter to its suppliers this week asking

them to help it reduce costs by 10% to cope with the price war

and oversupply in the market.

SAIC did not immediately respond to a request for

comment on the report.