The Chinese automotive industry is showing subtle signs of change. From Great Wall Motor announcing a two-day weekend for all employees to CATL and BYD raising salaries, leading car manufacturers are signaling improvements in employee benefits. At the same time, companies are beginning to address supply chain health, with BYD reforming its controversial internal payment system &#34;Di Chain,&#34; leading to shorter payment cycles for several car manufacturers. As the dawn of recovery appears for car manufacturers, they must face the harsh reality of a price war. BMW has taken the lead in cutting prices and promoting sales this year, continuing the strategy of exchanging price for volume. Experts point out that with macroeconomic conditions and consumer purchasing power not showing significant improvement, market demand is declining, and the car-buying demographic in mainland China consists of middle-aged individuals who are &#34;sandwiched between the elderly and children,&#34; facing triple pressures of retirement, childcare, and unemployment. &#34;Even with savings, they are reluctant to spend,&#34; leaving mainland car manufacturers in a dilemma of &#34;anti-involution,&#34; making this industry transformation, advocated by the government to shift from &#34;quantity&#34; to &#34;quality,&#34; a long and arduous battle.
Earlier this year, the employee cafeteria at Great Wall Motor in Baoding, Hebei, was filled with cheers during lunchtime. It was reported that employees discovered the 2026 work calendar marked &#34;two-day weekends&#34; while refreshing the company's internal system. This marks a key iteration in the company's employee vacation system, evolving from &#34;single-double weekends&#34; to &#34;big-small weeks,&#34; and now to a complete two-day weekend. Prior to this, on December 31, 2025, the power battery manufacturer CATL announced through its official recruitment platform that it would optimize the salary structure for frontline production employees, comprehensively raising basic wages and overall income levels. Meanwhile, several BYD employees recently revealed that they received salary adjustments, with increases reportedly ranging from 500 to 4,500 RMB, which BYD has also confirmed.
<h2>Progress Extending to Financial Health of the Industry Chain</h2>
From the implementation of Great Wall's &#34;two-day weekend&#34; to CATL and BYD subsequently adjusting salaries, a series of events seems to indicate that the &#34;anti-involution&#34; initiative in the automotive industry, advocated by the government since mid-last year, is showing initial signs.
The &#34;anti-involution&#34; process has also extended to deeper financial health aspects of the industry chain. In June last year, several leading car manufacturers publicly committed to shortening payment terms for suppliers to no more than 60 days. According to statistics from mainland media based on listed company financial reports, this commitment has been fulfilled over the past six months, especially showing significant improvement in the third quarter of 2025. In specific data, among 13 mainland listed vehicle manufacturers, compared to the first quarter of 2025, all manufacturers saw a decrease in &#34;accounts payable turnover days&#34; in the first three quarters; compared to the first half of the year, 11 manufacturers also showed a downward trend.
The financial situation of car manufacturers' suppliers has also improved. Financial report analyses of listed component companies show that nearly 70% of companies experienced a decrease in &#34;accounts receivable turnover days&#34; in the first three quarters. A staff member from a car manufacturer supplier, &#34;Doli Technology,&#34; confirmed that the current trend is &#34;an increase in cash payments and a decrease in bill payments,&#34; indicating that payment conditions are undergoing substantial improvement.
Even more noteworthy for the industry is BYD's adjustment to its internal supply chain financial system &#34;Di Chain.&#34; In the fourth quarter of last year, several suppliers reported to the media that BYD had initiated a reform plan for the &#34;Di Chain&#34; payment system starting in November last year, gradually transitioning payment methods to bank acceptance bills, commercial acceptance bills, and cash through point-to-point communication, with the entire transition period expected to take 1 to 2 years
Some suppliers have stated: &#34;The payment cycle for DiChain has previously reached up to a year, but in the future, suppliers will have it easier.&#34; Industry estimates suggest that with the DiChain system, BYD can save over 10 billion RMB in financing costs each year.
<h2>Experts: More like the beginning of a long transformation</h2>
In May last year, Great Wall Motor Chairman Wei Jianjun mentioned the financial situation of the industry during a live broadcast, hinting that &#34;the Evergrande of the auto circle&#34; already exists, sparking widespread discussion. Zhang Xiang, a researcher at the Automotive Industry Innovation Research Center of Beifang University of Nationalities, stated that BYD's reform of the payment system marks a new phase in the Chinese automotive industry, shifting from a focus on scale expansion to an emphasis on supply chain health and sustainable development.
However, Chen Binbo, former General Manager of Funeng Technology, pointed out that the emergence of positive signs does not mean the automotive industry has escaped &#34;involution&#34;; rather, it resembles the beginning of a long transformation, with overall market competition pressure still unrelieved. On one hand, some companies are raising salaries and implementing two-day weekends; on the other hand, there are reports of large automakers canceling high year-end bonuses. At the same time, the price war at the consumer end is becoming increasingly intense. On New Year's Day 2026, BMW significantly reduced the prices of its main models, with some models seeing price cuts of up to 300,000 RMB, indicating that exchanging price for volume continues to be the norm in the market.
Zhou Lijun, director of the Tengyi Research Institute, pointed out that the fundamental challenge of escaping &#34;involution&#34; lies in the macroeconomy. Consumer purchasing power has now declined; &#34;for example, previously there might have been 100 people with a demand for cars, but now only 50 remain.&#34; He specifically mentioned that the average car-buying age in China's auto market has reached 40 years, and this group of middle-aged individuals, who have both elderly parents and young children, faces triple pressures of retirement, childcare, and unemployment, &#34;even if they have savings, they dare not spend freely.&#34; Therefore, automakers still face a dilemma in &#34;countering involution.&#34;

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The Chinese automotive industry is undergoing a transformation, shifting from quantitative growth to qualitative improvement. Companies such as Great Wall Motor, CATL, and BYD have begun to enhance employee benefits, implement two-day weekends, and adjust salaries. However, the price war remains severe, market demand is declining, and consumers are facing multiple economic pressures. Despite the initial effectiveness of the "anti-involution" movement, automakers still need to confront a challenging path of transformation

- The Chinese automotive industry is experiencing subtle changes, highlighted by companies like Great Wall Motors and BYD improving employee benefits.  
- While these companies are focusing on supply chain health and financial stability, they face challenges from ongoing price wars and a decrease in consumer purchasing power.  
- Experts suggest that despite these positive signals, the industry still struggles with competitive pressures, indicating a prolonged transformation ahead.

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Mainland car companies' "anti-involution" still face a dilemma; the industrial transformation from "quantity" to "quality" has become a long and arduous battle