Huawei-Seres' joint brand Aito showcases its models at Auto China 2026 in Beijing in late April. CHINA DAILY
China's auto market is entering a phase where consumers prioritize reliable technology, user experience and brand credibility over big discounts, according to a new survey by McKinsey & Company.
The findings of its 2026 China Auto Consumer Insights suggest the yearslong price war in the world's largest auto market is beginning to lose its effectiveness. It comes as automakers continue to slash prices across electric and gasoline-powered vehicles.
According to the China Passenger Car Association, around 70 new energy vehicle models across premium, joint-venture and domestic brands offered discounts in the first quarter. Average price cuts reached 38,000 yuan ($5,300), or 13.7 percent of sticker prices. Gasoline-powered vehicles faced similar pressure, with average discounts of 37,000 yuan, or 14.3 percent.
Yet despite the scale of the discounts, consumer demand remained subdued. Passenger vehicle sales fell 18.5 percent year-on-year in the first four months, while new energy vehicle retail sales declined 17.2 percent, reflecting cautious consumer sentiment.
