Ending 12 consecutive months of sharp decline, fuel vehicles rebound! Say goodbye to the "one-price" price war

The just-passed first quarter of 2026, for automakers, after enduring a “hellish” start, ultimately delivered a scorecard that’s both encouraging and worrying.

According to the latest statistics released by the China Passenger Car Association (CPCA), in the Jan–Mar period this year, the national passenger vehicle retail market totaled 4.24M units, down 17% year over year. Among them, the decline rate for new-energy vehicles was noticeably higher than that of the overall market: retail totaled 1.84M units, down 24% year over year.

But China’s auto exports to a certain extent offset the slump in domestic sales. Data show that in Jan–Feb, China’s cumulative auto exports reached 1.55 million units, up 61% year over year. Of this, in February alone exports were 750k units, up 79%. In the same period, exports of new-energy vehicles were 320k units, up 120% year over year; cumulative exports in Jan–Feb were 670k units, up 88%.

Looking specifically at automakers, SAIC Group won decisively with more than 950k deliveries over BYD, reclaiming the sales crown. Geely, BYD, Chery, and Changan remained firmly in the second tier, and domestic brands covered the top five in sales. However, both BYD and Changan saw year-over-year declines. Meanwhile, FAW-Volkswagen and GAC Toyota, relying on hybrid offerings and locally upgraded versions, returned to an upward growth track; joint-venture brands exited the cliff-like declines and achieved stabilization with a rebound.

When traditional automakers competed for rankings, new-energy entrants opened an even harsher elimination round. Driven by “equal access to intelligent driving” and price rationalization, the first-tier landscape formed: Tesla China, Leapmotor, Li Auto, and NIO Group; the second tier was 小米 (Xiaomi), 极氪 (Zeekr), 问界 (AITO), 小鹏 (XPeng), 深蓝 (Deepal), and 岚图 (Voyah). Among them, both XPeng and Deepal also saw some year-over-year sales declines in the first quarter.

Despite an unfavorable start, the domestic auto market’s landscape has become clearer, overall showing a pattern of domestic brands leading strongly, joint ventures stabilizing and rebounding, and increased segmentation among new-energy entrants: domestic brands expand their advantages through new-energy offerings, exports, and multi-brand coordination; joint ventures hold the basic base for fuel and hybrids with hybrid models plus localized intelligent-driving capabilities; and new-energy entrants widen the tier gap with intelligent driving plus value-for-money.

SAIC reclaims the sales crown; fuel-car rebound hits bottom

In the first quarter of 2026, domestic brands still held absolute dominance. SAIC Group, BYD, Geely, Chery, Changan, and other first-tier domestic players performed steadily. Benefiting from advantages such as well-developed new-energy product matrices, comprehensive coverage across price bands, and faster expansion in overseas markets, they continued to widen their lead. The monthly sales of many domestic automakers remained consistently above the 200k-unit level, and overall competitiveness improved markedly.

SAIC Group regained the top spot for cumulative first-quarter sales with 750k units in sales (retail volume reached 320k units). Although it surpassed second-place Geely Auto Group (709.4k units) by nearly 300k units, the figure here includes sales from joint-venture brands (SAIC Volkswagen, SAIC General Motors).

What’s worth mentioning is that sales of domestic brands under SAIC—Roewe, MG, Maxus, Hongyan, Yuejin, and others—accounted for 67.5% of total sales, reaching 657k units, up 9.3% year over year. Meanwhile, among the joint-venture automakers under the Group, SAIC Volkswagen’s total sales in Jan–Mar were 189.9k units, down 16.75%; SAIC General Motors’同期 sales were 121.3k units, up 11.29%.

Geely Auto Group posted total sales of 709k units in the first quarter of 2026, becoming the sales runner-up among traditional automakers. Among them, the Geely brand (Geely and Geely Galaxy) sold 670k units, an absolute core pillar—especially after the Galaxy brand became independent, it has maintained the “release one product, sell another” characteristic. And the cumulative sales of Zeekr + Lynk & Co were 950k units, ranking near the top as well in the premium pure-electric market.

With BYD Group in third place, cumulative sales in the first quarter of 2026 were 7.005 million units, only within one million units of Geely Group (the runner-up). Including Chery Group and Changan Auto right behind it—and even Great Wall Auto at No. 10—they share one common point: growth in overseas export volume. This is also the steep “second growth curve” that Chinese auto companies are carving out as the domestic market is still in a downward channel.

Data show BYD’s total exports in Jan–Mar were 3.198 million units. In March alone, the year-over-year export growth rate was as high as 65.2%. Meanwhile, Chery Group remains “No. 1” in China’s auto export market: its total exports in the first quarter were 200k units, up 53.9% year over year, accounting for around 65% of the Group’s sales—already the bulk of revenue. In addition, Changan Auto’s overseas sales in March also首次单月突破100k辆, reaching 104,081 units, up 60% month over month, a historical high.

The automakers ranked 6th and 7th—FAW-Volkswagen and GAC Group, including the latter’s joint-venture brands—both relied on the rebound of fuel vehicles. They held their baseline with hybrid models plus localized intelligent-driving, and also actively pivoted toward new-energy cars to capture new market growth points. FAW-Volkswagen’s Magotan and Tanyue fuel versions rebounded with stable pricing. FAW Audi sold 59k units in the first quarter, ranking first among luxury fuel vehicles. In GAC Group, GAC Toyota’s Dual-Engine hybrid models account for more than 55%. After the launch of its pure-electric models, the Arcfox? (铂智3X, 铂智7), it directly targeted BYD’s Song and Han family. In the first month after launch, orders surpassed 12k units.

From the market perspective, more and more traditional automakers have given up “single fixed price” price-involution and instead used a combination of “clearly listed prices + intelligent-driving packages + financial incentives,” bringing the 100k–250k RMB home-car segment back to a value-based competition. This has also led domestic brands and joint ventures to confront head-on in the core track.

According to statistics from Cui Dongshu, Secretary-General of the CPCA, in March 2026, terminal discounts for traditional fuel cars narrowed to 17.8%, down 4.3 percentage points compared with the same period in 2025. Luxury car discounts were 21.5%, joint-venture fuel cars were 17.2%, and the industry’s vicious price war has largely exited.

When “equal price for gas and electric” is no longer just a slogan and becomes standard across the industry, traditional fuel cars also see a bottoming-out rebound. According to data from the China Association of Automobile Manufacturers (CAAM), in March 2026, domestic sales of traditional-fuel passenger vehicles were 973k units, down slightly 2.1% year over year, and up 38.8% month over month, ending a trend of steep year-over-year declines for 12 straight months. At the same time, new-energy vehicle sales still maintained steady growth. Among them, “equal access to intelligent driving” has become a core driving factor: currently, 100k RMB-class models are standard with L2, while 200,000 RMB-class models have laser radar widely adopted. Therefore, consumers’ car-buying decisions have shifted from “comparing prices” to “comparing intelligent driving.”

“Weili” warms up; XPeng falls behind again

Although cumulative passenger vehicle sales in the first quarter of 2026 declined year over year, new-energy vehicle penetration continued to rise. Both plug-in hybrids and pure electrics achieved growth on two fronts. Preliminary statistics from CPCA show that in March, national passenger vehicle market new-energy retail sales were 784k units, with new-energy penetration at 47.3%, up month over month from February. Cumulative new-energy retail in the first quarter was 1.01M units, with new-energy penetration at 43.5%. Although the overall penetration rate fell compared with the same period in 2025, from January to March 2026 there were two consecutive months of month-over-month improvement, and the repair trend is clear. New-energy vehicles are still the core force driving growth for the entire auto market.

The TOP10 sales rankings of new-force brands in the first quarter of 2026 show that the new-force landscape has been completely reshaped. Excluding Tesla China, which firmly held the champion spot, Leapmotor followed closely; Li Auto remained steady, NIO surged, Zeekr grew strongly, and Xiaomi entered forcefully. The traditional “Voyah-Li-Xiao-Li (蔚小理)” era is over; now it’s a game of “value-for-money, premiumization, and cross-border players” in the “three-way contest.” March’s quarter-end volume push drove an overall rebound, with the strong enjoying consistent strength due to head effects, while segmentation in the mid-tier has intensified.

According to Tesla’s global production and delivery report for the first quarter of 2026, Tesla continues to sustain a strong growth momentum in global markets. In China, Tesla Shanghai’s super factory delivered over 85.6k electric vehicles in March, a new high within the year. In the first quarter, it delivered 2.13 million vehicles, up 23.5% year over year. Among them, Model Y remained the top wholesale sales winner for domestic passenger cars. Model 3 and Model Y produced at the Shanghai super factory ranked among the top 3 in export volume for single models in January, and together exceeded 50k units exported to overseas markets.

Some analysts believe Tesla’s sales have shown “pressure globally, growth in China”, mainly due to three factors. First, last year Tesla’s sales were weak in the domestic same period, especially in February last year when the Model Y model switch and the Spring Festival disrupted performance. Second, the 7-year ultra-low interest car purchase program (financial policy) launched in January this year boosted sales. Third, Model Y and Model Y L still have a relatively solid customer base in China’s pure-electric SUV market.

Leapmotor ranked No. 1 among new-force brands in China by delivery volume. In March alone, its total deliveries for all models again exceeded 50,000 units, up 35% year over year. Cumulative deliveries in the first quarter reached 709.4k units. Leapmotor’s ability to keep being the sales champion is inseparable from its rich product matrix—up to now, Leapmotor has completed product layout across its full matrix.

In March, Leapmotor A10 for the first time brought laser radar and “slot-to-slot” advanced driver-assistance functions up to the 100k RMB class, becoming an important driver of sales growth. After its launch, order demand stayed high. Subsequently, Leapmotor D19 is scheduled to go on sale on April 16. Also, Leapmotor achieved a financial breakthrough: in 2025, it achieved annual profitability for the first time, becoming the second profitable new domestic automaker brand after Li Auto.

Li Auto also performed well. In March, it delivered 41,053 new vehicles, with a significant improvement month over month from February. Just the Li Auto i6 alone contributed more than 24k units in sales. Li Xiang, Chairman and CEO of Li Auto, said that as the production capacity bottleneck was fully resolved after the Spring Festival, i6 deliveries continued to climb. Li Auto i8 benefited from excellent user reputation, and order volumes also grew steadily. The all-new Li Auto L9 is also expected to be launched in the second quarter, providing assurance for further market increment.

The largest year-over-year growth in March was NIO Group. In March, it delivered 35,486 new vehicles, up 136% year over year. In the first quarter, it delivered 83.5k new vehicles in total, up 98.3% year over year, exceeding the upper limit of the financial report’s delivery guidance. In addition to the main brand NIO’s new ES8, which continued to serve as the sales mainstay, brands targeting the family market—Leto (乐道)—and the boutique small-car brand Firefly also achieved month-over-month growth of over 130%.

Much watched by the market, Xiaomi Auto delivered over 20k units in March. The new-generation Xiaomi SU7 began deliveries immediately upon launch, with fewer than 10 days passing before delivery volume broke 7,000 units. It drove a dual-engine effect together with the continuously hot-selling YU7, bringing first-quarter cumulative sales close to 79k units and placing it 5th overall.

Then came Zeekr and AITO Wenjie. Both are brands focusing on the mid-to-high-end market. Zeekr performed even more impressively: in March it delivered 29,318 units, up 90% year over year. The single model Zeekr 9X kept selling hot; even in March, its deliveries broke 10k units. Meanwhile, Zeekr 8X’s pre-sale performance exceeded expectations, further consolidating Zeekr’s share in the premium new-energy market. Worth mentioning is that Zeekr is the only brand among mainstream new-force brands that achieved both same-period and month-over-month growth for two consecutive months.

In March, AITO Wenjie sold 20,234 units, up 47.74% year over year. Cumulative sales in the first quarter were 70,249 units, up 55.64% year over year. Among them, the Wenjie M9 sold over 10,000 units in the first quarter and remains the main force in the premium market. Although the all-new model Wenjie M6 only started taking reservations at the end of March (on the 23rd), orders exceeded 60k within 24 hours, and market reaction was enthusiastic.

With good news comes concern. Although XPeng and Deepal both saw substantial month-over-month increases in March sales—up 80% and 87.8% respectively—showing a strong rebound momentum, their cumulative sales in the first quarter still fell markedly year over year. Deepal was down 17.7% year over year, while XPeng was down severely by 33.32% year over year. With policy tailwinds fading and competition in the pathways of technology and premiumization intensifying, XPeng’s goal of 5.5–300k units in 2026 is clearly under significant pressure.

The Voyah brand, last among the TOP10, showed an overall bright performance. In the first quarter of 2026, new vehicle deliveries were 33,892 units, up 30.2% year over year. In March alone, deliveries were 15,019 units, achieving double-digit growth of “up 50% year over year and up 80% month over month.” It is evident that Voyah not only increased its sales scale, but also maintained a more stable growth pace.

Overall, the new-force landscape continues to diverge. Head brands widen the gap by product strength, intelligent-driving systems, and delivery capabilities. Head brands such as Leapmotor and Li Auto remain leading thanks to scale effects and product-matrix advantages. Mid-tier brands show a split: Zeekr and Voyah, leveraging hit models, achieve rapid growth and increase, while the survival space for mid- and small brands is further being squeezed. In addition, competition in the premium new-energy market is fierce, and the pattern in the home pure-electric and the range-extended market is gradually solidifying.

At auto shows plus the May Day holiday, the second quarter may bring a sales growth driver

In the first quarter of 2026, China’s auto market has completely bid farewell to “single fixed-price” price-involution and officially entered a new stage driven by intelligent driving, with value prioritized and global competition. Within this, domestic brands moved from “leading in China” to “global benchmark comparisons.” Joint-venture brands shifted from “cutting prices to survive” to “building ecosystems together.” And new-force players moved from “brutal growth” into “the strong stay strong.”

Next, with the government’s consumption-promotion efforts and corresponding policies in multiple provinces and cities, the 2026 Beijing Auto Show opening on April 24 will fully energize the market atmosphere and accelerate the gathering of customers. At the same time, more automakers will also roll out 2026 model-year revised versions. These will generally follow a strategy of “adding features without raising prices.” Intelligent-driving, cockpit, and safety configurations will see comprehensive upgrades. Combined with consumption-promotion policies such as purchase subsidies and scrap-and-replace rewards continuing across more than 20 provinces and cities nationwide, these will directly drive demand for household trade-ins and upgrades.

Auto shows and the May Day holiday will also create consumption momentum together and become the core growth points for the second quarter. After all, with the continued boom in self-drive travel over the past two years, 100k RMB-class new cars already come standard with L2, and 200,000 RMB-class models have laser radar widely adopted for advanced intelligent driving. These improve self-drive travel experiences and will also better stimulate demand growth for both new purchases and trade-ins. During this period, major automakers will launch promotional discounts to push and re-emphasize their offerings.

For the full-year 2026 auto market, Cui Dongshu is optimistic. He expects full-year passenger vehicle retail sales of 24.50 million units, up 3.6% year over year; new-energy passenger vehicle wholesale sales of 16.8 million units, up 34%, with penetration rate exceeding 58%. Although volatility exists in overseas market tariff policies, China’s auto export share continues to rise. The share of overseas sales for domestic brands exceeds 30%, and globalization has become a core support for withstanding domestic competitive pressure.

As major automakers’ March sales gradually rebound—rising 40%–50% month over month versus February—together with updates to new intelligent-driving technologies in April and May, major new model upgrades and generational changes, and controlled market end discounts as well as improvements in channel profitability, all will benefit sales pacing. It is expected that China’s auto market sales in the second quarter will continue to grow month over month; year-over-year declines may narrow further and could even turn positive.