On January 9th, Cui Dongshu, Secretary-General of the China Passenger Car Association, unveiled data pointing to an intensifying competitive landscape in the market. By December 2025, the average price of domestically produced new energy vehicles (NEVs) is projected to plummet to RMB 136,000, marking a significant RMB 20,000 (14.7%) reduction. Throughout the year, the average price of new passenger car models that have seen price cuts will stand at RMB 191,000, experiencing an average price slash of RMB 20,000 (10.5%). Specifically, NEV models subject to price reductions will average RMB 195,000, with a notable RMB 21,000 (11%) decrease.
Zheng Yun, Global Senior Partner at Roland Berger, forecasts a rebound in the profit margin of China's automotive sector by the third quarter of 2026. Despite the automotive market achieving a record-breaking scale in 2025, profitability faces challenges, with the industry's average profit margin hovering around 4.4% and over half of dealers incurring losses. Currently, there's a discernible shift towards rationality in the 'price war,' leading to increased industry concentration. The forthcoming market landscape will be characterized by differentiation, with the core of competition pivoting towards capital. The fluidity of capital and the efficiency of its allocation are set to emerge as pivotal factors in reshaping the industrial terrain.