The disappearing "year-end surge" in the auto market

The Chinese automobile market is presenting a sense of "folding".

In November, Hongmeng Zhixing exceeded the 80,000 mark for the first time, vowing to reshape the luxury car market landscape; Geely's monthly sales exceeded 310,000 units, achieving great success in its new - energy transformation; Leapmotor's sales soared by 75% year - on - year, shouting out its ambition to reach one million sales next year.

However, a set of statistical data released by the China Passenger Car Association earlier showed that from November 1st to 23rd, the retail sales data of the national passenger car market declined both year - on - year and month - on - month. Currently, there are no signs of improvement in this data. After the traditional "Golden September and Silver October" and during the window period of pushing sales before the expiration of the full purchase tax exemption policy, the year - end uptick effect in the auto market failed to materialize.

Behind the prosperity of leading enterprises and the cold market, the elimination race in the Chinese automobile market is accelerating. This is why Gui Shengyue of Geely is warning about the elimination race, and Li Bin of NIO is struggling for profitability. Because they know better than anyone: the era of high - growth is over, and the cruel era of stock competition has arrived.

In November, the Chinese auto market showed a pattern of numerous giants and a sales gap, with the market pattern sharply differentiating before the year - end sprint.

BYD's sales exceeded 480,000 units in November, and overseas sales became the highlight of the month, breaking through 130,000 units for the first time. To some extent, the overseas sales data alleviated investors' concerns about its pressured domestic sales. On December 2nd, when the Hong Kong - listed new - energy vehicle sector declined as a whole, BYD Co., Ltd. closed up 2.19%.

Geely Automobile's stock price also rose against the trend, thanks to the accelerated new - energy transformation. Its sales reached 310,000 units in November, and it is expected to achieve the annual sales target of 3 million units. Among them, the sales of new - energy models increased by 53% year - on - year in November, reaching 180,000 units, and the new - energy penetration rate exceeded 60%. Zeekr Technology's sales increased by 3.68% month - on - month in November, reaching 63,902 units, but the performance of internal brands showed differentiation. The sales of Lynk & Co brand dropped from over 40,000 units in October to 35,059 units in November.

Among the new forces, Hongmeng Zhixing and Leapmotor have completely left the rest behind, becoming challengers to the giants. Hongmeng Zhixing sold 81,864 vehicles with its entire "Five Realms" series, setting a new monthly delivery record. Leapmotor, with a delivery volume of 70,327 vehicles, has led the single - brand championship among new forces for 9 consecutive months.

Xiaomi Automobile continued to maintain a level of over 40,000 units. The sales of "NIO, XIAOMI, and LI" declined month - on - month in November, all falling below the 40,000 - unit mark, resulting in an obvious "brand gap" among new forces in the range of 50,000 - 70,000 units.

Among the representatives of the "national team", VOYAH performed impressively, breaking through the 20,000 - unit mark and delivering 20,005 units in November. This indicates that after a long period of climbing, VOYAH has begun to show its risk - resistance ability in the 300,000 - yuan - level market. Avatr maintained a steady performance, delivering 14,057 units with a slight month - on - month increase.

While the total sales were differentiating, the sales structure in November also revealed fundamental changes in consumers' psychology.

The disappearance of the year - end uptick is a dangerous signal. According to previous years' logic, as long as there were price cuts and promotions, sales could be boosted. However, in November this year, even with the dual stimulus of the "trade - in" subsidy and the car companies' year - end sales push, the overall market remained weak.

Firstly, the transfer of the dividend period of "extended - range/hybrid" vehicles. The sales pressure on some car companies mainly comes from the decline of "extended - range/hybrid" models. When the technological barriers are leveled, extended - range products lacking core differentiation (such as AI computing power or cost control ability) have seen their market share being eroded by competitors.

Secondly, the marginal effect of the price war is decreasing. In the low - end market, consumers are waiting for lower prices or delaying car purchases due to unstable income expectations. In the high - end market, simply piling up configurations like "refrigerators and color TVs" can no longer maintain the premium. Only real technological barriers can retain users.

Gong Min, the head of China auto industry research at UBS Investment Bank, analyzed that before the end - of - year policy stimulus faded, there were already signs of weakening demand. This is a negative signal for the entire auto market.

This also indicates that the competition in the auto market in 2026 will be more intense.

Lai Yizhe, the head of Asia auto industry research at J.P. Morgan, analyzed to Wall Street News that the Chinese auto market may enter a more challenging environment in 2026, which will be a year when the pattern differentiation further intensifies.

A major factor is that the advantages of purchasing new - energy vehicles will be further weakened. According to the policy plan, a 5% purchase tax will be restored for new - energy vehicles in 2026. UBS predicts that this policy adjustment will directly increase consumers' car - buying costs. For example, for a new - energy vehicle worth 300,000 yuan, consumers will have to pay an additional 15,000 yuan.

As for the subsidy reduction, UBS's baseline scenario is that although the scrapping and trade - in subsidies will be partially continued in 2026, the amount will be reduced. It is expected that the subsidy for purchasing electric vehicles will be reduced from the current 20,000 yuan to 15,000 yuan. With "increased taxes + reduced subsidies", the car - buying threshold will be significantly raised.

Gong Min said that the auto sales structure in 2026 will also change accordingly. Low - end models that benefit more from stimulus policies will face greater pressure, while in the past, during the downturn of the domestic auto market, the high - end market was more resilient, and exports will also accelerate.

According to UBS's forecast, including exports, the wholesale growth rate of Chinese passenger cars will slow down to 3% in 2026; and the wholesale growth rate of electric vehicles (including exports) will slow down to 15%.

This also shows that in the face of the slowdown in market demand and the escalation of price competition, the era of general growth in the Chinese auto market has completely ended. It will be difficult for there to be dark - horse players in the future market, and the market will further concentrate on leading players.

As Gui Shengyue, the CEO of Geely, said, the industry will start a real process of weeding out next year. This is also the reason why car companies like Geely have been continuously integrating internal resources in the past year. In the stock market, multiple brands no longer bring the advantage of "more children, more strength in the fight", but rather internal strife due to resource dispersion. Only by uniting as one can they withstand the upcoming cold winter.

When the tide truly recedes in 2026, the survival race among car companies will just begin.

This article is from the WeChat official account "Auto You Fan Er", author: Zhou Zhiyu, published by 36Kr with authorization.