The online car trading platform Autohome continues to profit by connecting buyers and sellers, but weak demand, reduced advertising budgets, and the rise of new competitors are gradually undermining its former advantages.
<h4>Key Points:</h4>
<ul>
<li>As the Chinese automotive market significantly contracts, Autohome's revenue in the first quarter plummeted nearly 28%, mainly due to automakers cutting advertising spending and a decrease in the number of dealers paying for its services.</li>
<li>Compared to car dealers with large inventories, Autohome's business model has been less impacted, but its performance still shows that the sluggish Chinese automotive market has begun to affect related businesses such as online trading, advertising, and transaction services.</li>
</ul>
Hu Minghe
The prolonged price war in the Chinese automotive industry has impacted automakers, dealers, and used car traders. Now, this pressure is further spreading to a place that neither manufactures cars nor hoards them.
This place is Autohome (ATHM.US; 2518.HK), one of the most well-known online service platforms for automotive consumers in China, founded in 2005 by car enthusiast Li Xiang. Li Xiang later founded the electric vehicle company Li Auto. Autohome has gradually become an important platform for car buyers in China to find information, providing services such as a vehicle database, reviews, price comparisons, and forums.
Given this background, the significance of Autohome's latest quarterly performance is not just another weak quarter for a single company. It is also a useful indicator for observing the Chinese automotive market and online business activities. Most of Autohome's revenue does not come from directly selling cars, but from assisting automakers and dealers in reaching buyers, obtaining sales leads, and facilitating transactions. This means it is less directly impacted by falling car prices compared to new and used car sellers with large inventories. However, this also means that the company's business relies on transaction activity and market confidence, both of which are currently quite scarce.
<h4>Advertising Engine Stalls</h4>
Autohome's revenue in the first quarter fell 27.9% year-on-year, from 1.45 billion yuan last year to 1.05 billion yuan (USD 152 million). The net profit decline was even larger, plummeting 87.6% from 356 million yuan to 44.3 million yuan. More concerning is that the company has also turned to an operating loss, recording an operating loss of 34.4 million yuan, ending years of operating profit.
The pressure is reflected across all of the company's major businesses, as automakers tighten advertising budgets, media service revenue fell 32.8% to 163 million yuan; lead service revenue dropped 22% to 504 million yuan, reflecting a decrease in the number of paying dealers; online marketing and other revenue also declined 32.5% to 382 million yuan. Management attributed the revenue decline to falling car sales and the widening losses of many automakers and dealers, leading both parties to cut related expenditures.
The Chinese automotive industry is experiencing one of its weakest starts in recent years in 2026, with domestic car sales declining for seven consecutive months, particularly evident in April, which saw a year-on-year drop of 21.6%. Against this backdrop, companies are significantly cutting advertising and other service expenditures, causing established platforms that rely on credible content and user traffic to undergo a painful transformation
<h4>New Competitors Rising</h4>
The pressure faced by Autohome is also a reflection of the changing internet usage habits. Li Xiang stated in an interview last year that he founded Autohome not merely out of a love for cars, but because he saw a market opportunity. He chose the automotive industry because cars are standardized products. After founding Autohome in June 2005, he quickly built it into one of China's largest automotive vertical platforms.
One of his most impressive reflections is that Autohome became &#34;too easy to operate&#34; around 2009, as there were almost no real competitors at that time. The company was born in an era dominated by search engines, forums, and professional reviews, attracting consumers who were already seriously considering purchasing a car. But today's world is entirely different.
The automotive information and trading platform Dongchedi, incubated by TikTok's parent company ByteDance, has grown within an ecosystem driven by short videos and algorithms. It pushes automotive content through recommendation streams, reaching users at the early stages of consumer decision-making. Reports suggest that Dongchedi is considering an IPO in Hong Kong, with a fundraising scale potentially reaching $1 billion to $1.5 billion, reflecting that investors may prefer platforms that can directly convert traffic into transactions.
In recent years, Dongchedi has promoted a new cooperation model where some dealers pay based on actual transaction volume rather than just for sales leads, challenging the previous model of simply selling traffic to automakers and dealers. Its rise also raises a question: In the face of newer and more efficient business models, can Autohome still monetize its value to car buyers in the same way?
As Autohome further delves into the transaction process, the company also faces trust challenges. In January this year, China's internet regulatory authority criticized Autohome and other automotive vertical platforms during a special campaign to rectify the chaos in automotive evaluations, pointing out that some evaluation content could mislead consumers.
<h4>Haier Takes the Helm</h4>
In response to changes in the external environment, Autohome's answer is to no longer just be a media and lead platform. Management has stated that the company is transforming from an automotive information website into a comprehensive automotive service ecosystem. In the first quarter, the company launched several new measures, including app upgrades, expanding quality content, introducing AI and large language model (LLM) tools, piloting online car purchasing services in Shenzhen and Xi'an, and launching operations in Thailand and a cross-border used car export platform.
The purpose of these initiatives is to bring Autohome closer to the actual transaction process. Particularly, the expansion into Thailand and the development of export businesses indicate that as Chinese automakers accelerate their overseas ventures, international markets may become an important growth direction for the company in the future. Meanwhile, as Chinese consumers increasingly lean towards purchasing lower-priced used cars, the platform can also create more value through services such as inspection, pricing, matching, and building trust.
This also explains why Haier acquired control of Autohome last year. The Chinese home appliance giant, through its subsidiary Cartech, spent approximately $1.8 billion to acquire about 43% of Autohome's shares from long-term shareholder Ping An Insurance. Haier is not just buying a gradually aging automotive website, but also traffic, data, and a gateway into a broader automotive service ecosystem
But the problem is that the timing is not ideal. Haier is trying to help Autohome create a new growth engine, but the fuel for the old engine is running low. According to QuestMobile data, Autohome's average daily mobile users in March still exceeded 80 million; as of the end of March, the company held approximately 20 billion yuan in cash and investment assets. At the same time, the company has announced the distribution of dividends for the first half of the year and is actively repurchasing shares to support stock performance.
However, these measures have not effectively reassured worried investors. Over the past year, Autohome's stock price has fallen by about 30%; however, in the three trading days following the latest earnings announcement, the stock price rebounded nearly 10%, indicating that the market's initial expectations may have been more pessimistic.
Autohome is far from being eliminated. The company has ample funds, remains profitable, and is relatively less affected by the direct impact of the price war in the Chinese automotive market. But the problem is that the company clearly lacks new growth momentum. For Autohome, the issue is not whether Chinese consumers still need car information and decision-making assistance—the answer is obviously yes. The real question is whether Autohome is still the first platform that comes to consumers' minds when they need this assistance

ATHM

02518

Autohome's revenue in the first quarter fell by 27.9% year-on-year to 1.05 billion yuan, and net profit plummeted by 87.6% to 44.3 million yuan, marking the first time the company reported an operating loss. Affected by the sluggish Chinese automotive market, automakers cutting advertising budgets, and the rise of new competitors, the company's media services and dealer services revenue both declined significantly, reflecting that industry pressures have impacted online trading platforms

BambooWorks

Autohome

AUTOHOME-S

Li Auto

LI AUTO-W

Haier Smart Home

HAIER SMARTHOME

Ping An

PING AN

PING AN-R

Ping An Insurance

The sluggish car market and the rise of competitors have led to a nearly 90% drop in Autohome's profits in the first quarter