Data from Cui Dongshu, secretary-general of the China Passenger Car Association, shows that in February 2026, the average retail price of passenger vehicles reached 180,000 yuan, up 15,000 yuan year-on-year. This price curve, first declining then rising, outlines the profound transformation the Chinese auto market is undergoing — from disorderly price wars to policy-guided value competition.
Price War Receding
For some time, the automotive industry’s profit margins have been under sustained pressure. Solving the competitive dilemma so that selling more also means earning more has become a mandatory question for the high-quality development of China’s automotive industry.
The Ministry of Industry and Information Technology convened a meeting with key automakers to regulate competitive order. CAAM released China’s first vehicle cost calculation rules to curb irrational low-price competition at the source.
Terminal Market Adjustment
The automotive terminal market is undergoing adjustment: the sales-oriented approach is exiting, and the survival-oriented approach is taking over. In May, the domestic auto market was under pressure, with dealers facing significant inventory pressure. CADA data shows that the May 2026 dealer inventory alert index remained high.
Core of Value War
The core of the value war lies in: enhancing product appeal through technological innovation, building brand loyalty through user experience, and creating sustained value through full-lifecycle services. The shift from trading volume for price to quality at fair prices is not just a change in competition methods but an upgrade in the industry’s development stage.
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