The "tail" that has disappeared from the car market

Author | Zhou Zhiyu

Editor | Zhang Xiaoling

The Chinese automotive market is showing a sense of "folding."

In November, Hongmeng Zhixing broke the 80,000 mark for the first time, determined to rewrite the luxury car market landscape; Geely's monthly sales exceeded 310,000 units, achieving significant progress in its transition to new energy; Leapmotor's sales surged 75% year-on-year, declaring an ambition for one million sales next year.

However, a set of statistics released by the Passenger Car Association showed that from November 1 to 23, the national retail data for the passenger car market experienced a year-on-year and month-on-month decline. Currently, there are no signs of improvement in this data. After the traditional "golden September and silver October," and with the purchase tax exemption policy about to expire, the year-end tail effect of the car market has disappointed.

While leading enterprises are thriving, the overall market is cooling, indicating that the elimination race in the Chinese automotive market is accelerating. This is why Geely's Gui Shengyue is warning about the elimination race, and Nio's Li Bin is focused on achieving profitability. They understand better than anyone: the era of high growth has ended, and the brutal era of stock competition has arrived.

November's Chinese car market reflects a pattern of numerous giants and sales gaps, with the market structure sharply differentiating before the year-end sprint.

BYD's sales in November exceeded 480,000 units, with overseas sales becoming a highlight, breaking through 130,000 units for the first time. The overseas sales data alleviated investors' concerns about pressure on its domestic sales to some extent. On December 2, while the Hong Kong stock market's new energy vehicle sector fell overall, BYD's shares closed up 2.19%.

Geely Auto also rose against the trend, benefiting from the accelerated transition to new energy. Its sales in November reached 310,000 units, making the annual sales target of 3 million units within reach. Among them, new energy models saw a year-on-year increase of 53% in November, reaching 180,000 units, with a new energy penetration rate exceeding 60%. ZEEKR's sales in November increased by 3.68% month-on-month to 63,902 units, but there was a divergence in internal brand performance, with the Lynk & Co brand dropping from over 40,000 units in October to 35,059 units in November.

Among the new forces, Hongmeng Zhixing and Leapmotor have completely distanced themselves from the majority, becoming challengers to the giants. Hongmeng Zhixing sold 81,864 units across its entire "Five Realms" series, setting a new monthly delivery record. Leapmotor delivered 70,327 units, leading the new force single-brand championship for nine consecutive months.

Xiaomi Auto continues to maintain a level of over 40,000 units. In November, "Wei Xiaoli" experienced a month-on-month decline in sales, with all three brands falling below the 40,000 mark, resulting in a noticeable "brand gap" among new forces in the 50,000-70,000 range.

Among the "national team" representatives, Voyah performed well, surpassing the 20,000 mark with 20,005 units delivered in November. This indicates that Voyah, after a long climb, is beginning to show resilience in the 300,000-level market. Avita maintained stability with 14,057 units delivered, showing a slight month-on-month increase.

While total differentiation is occurring, the sales structure in November also reveals fundamental changes in consumer psychology.

The disappearance of the year-end tail effect is a dangerous signal. According to past logic, as long as prices are reduced and promotions are offered, sales can be boosted. However, in November this year, even with the dual stimulus of "trade-in" subsidies and automakers' year-end push, the overall market remained weak First, the transfer of the "range extender/hybrid" dividend period. Some car manufacturers are facing sales pressure, mainly due to the decline in "range extender/hybrid" models. When the technical barriers are leveled, and the range extender products lack core differentiation (such as AI computing power or cost control), market share begins to be eroded by competitors.

Second, the marginal effect of the price war is diminishing. In the low-end market, consumers are waiting for lower prices or delaying purchases due to unstable income expectations. For the high-end market, simply relying on "refrigerator and TV" configurations can no longer maintain a premium; only true technical barriers can lock in users.

Gong Min, head of China automotive industry research at UBS Investment Bank, pointed out that signs of weakened demand have already appeared before the year-end policy stimulus withdrawal. This is a negative signal for the entire automotive market.

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

Lai Yizhe, head of Asian automotive industry research at JP Morgan, analyzed for Wall Street Insight that the Chinese automotive market may enter a more challenging environment in 2026, which will be a year of further differentiation in the landscape.

One major factor is that the advantages of purchasing new energy vehicles are further weakened. According to policy planning, a 5% purchase tax will be reinstated for new energy vehicles in 2026. UBS predicts that this policy adjustment will directly increase consumers' purchasing costs. For a new energy vehicle priced at 300,000 yuan, consumers will need to pay an additional 15,000 yuan.

As for the subsidy withdrawal, UBS's baseline scenario is that while scrapping and trade-in subsidies will partially continue in 2026, the amounts will shrink. It is expected that subsidies for purchasing electric vehicles will decrease from the current 20,000 yuan to 15,000 yuan. "Increased taxes + reduced subsidies," between the inflow and outflow, the threshold for purchasing a vehicle will be significantly raised.

Gong Min stated that the sales structure of automobiles in 2026 will also change as a result, with low-end models benefiting more from stimulus policies facing greater pressure, while the high-end market has shown more resilience during previous downturns in the domestic automotive market, and exports will accelerate.

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

This also indicates that, in the face of slowing market demand and escalating price competition, the era of widespread growth in the Chinese automotive market is completely over. It will be difficult for future markets to have dark horses, and the market will further concentrate on leading players.

As Geely's CEO Gui Shengyue said, the industry will begin a real "survival of the fittest" next year. This is also the reason why car manufacturers like Geely have been continuously integrating internal resources over the past year. In a saturated market, having multiple brands no longer brings the advantage of "more children make it easier to fight," but rather leads to internal friction due to resource dispersion. Only by uniting can they withstand the coming winter.

When the tide truly recedes in 2026, the survival competition among car manufacturers will just begin