Policy and Market Double "Shift" - Hidden Currents Surge in the Spring Car Market

China Securities Journal, February 20 (Reporter Liu Yang) — During the Year of the Horse in 2026, influenced by consumption policies and seasonal factors, the domestic auto market is primarily focusing on financial policies, with increased efforts to reduce retail inventories during the long holiday period.

During the Spring Festival, Caixin reporters visited multiple offline stores, including Leap Motor, Huawei authorized experience stores, Xpeng Motors, and BMW, to observe the market performance of automakers during the holiday.

“(During the Spring Festival) we offered a cash discount of 11,000 yuan, and the Leap C11 model can save about 40,000 yuan at most. With the B01 (after stacking discounts), you can drive it home for just over 80,000 yuan,” said a salesperson at Leap Motor’s Haikou Meilan District center, who was busy explaining to the continuous stream of customers. “Our main selling point is value for money. All models support 5 years of zero interest, with a minimum monthly payment of 483 yuan.”

In a BMW 4S shop in Pudong, Shanghai, staff also repeatedly informed consumers about the recent adjustments to sales policies. “Since January 1, BMW China has adjusted the suggested retail prices for more than 30 models first,” said the staff. The BMW 530Li Luxury model, which was priced over 500,000 yuan in 2024, now costs about 370,000 yuan, a nearly 30% price reduction.

“Although we did not launch special promotional policies for the Spring Festival, many consumers still came to inquire about cars. On the morning of the second day of the Lunar New Year, we received five groups of customers consecutively.” Unlike BMW and Leap Motor, Xpeng Motors did not launch targeted promotions, but all models previously enjoyed a 7-year ultra-low interest financial purchase policy, which still attracted many customers. According to Xpeng sales staff, new models to be launched later are likely to enjoy this policy as well.

At the entrance of the LeDao (ONVO) brand store in Beijing, the reporter noticed a prominently displayed poster stating “LeDao L90 Car Purchase Benefits Further Enhanced,” highlighting a 7-year 0.49% ultra-low annual interest rate, combined with transparent policies such as zero financial service fees and no penalty for early repayment, reducing the overall cost of buying a car—L90’s down payment starts at 35,960 yuan, with a daily payment of 89 yuan. The sales consultant told the reporter that choosing the “rent electric” mode can further enjoy purchase tax discounts, reducing the tax by an additional 5%, and since the battery is leased, the corresponding part is exempt from purchase tax, saving up to 3,805 yuan.

The reporter observed that, compared to the past when direct official price cuts were common, sales staff now prefer to explain financial plans, service packages, and hidden benefits to customers, guiding them to calculate the “comprehensive value” of their purchase. Moreover, the consumer groups and demands visiting showrooms are becoming more diverse. At a dealership in Chaoyang District, Beijing, Mr. Li told the reporter that his old car has been used for a long time, and his family is about to welcome a second child, so he is considering replacing it with a seven-seat large SUV. “The government subsidies plus the dealer discounts can save more than 20,000 yuan, which is real money for us.”

Unlike Mr. Li’s decisive purchase, some consumers remain cautious. A man who stayed at a certain brand’s 4S store for a long time said he has been paying attention to policy changes and manufacturer promotions since November last year. He also test drove several models but has not yet decided to buy a new car.

On December 30, 2025, the Ministry of Commerce and seven other departments issued the “Implementation Rules for 2026 Car Old-for-New Subsidies,” which took effect on January 1, 2026. The new policy clarifies two major subsidy models: under the scrapping and renewal mode, consumers purchasing new energy passenger vehicles can enjoy a subsidy of 12% of the new car price, with a maximum of 20,000 yuan; for gasoline vehicles with a displacement of 2.0 liters or below, the subsidy is 10% of the new car price, up to 15,000 yuan. Under the replacement and renewal mode, consumers purchasing new energy passenger vehicles can enjoy an 8% subsidy, with a maximum of 15,000 yuan. In response, various regions have actively implemented local car old-for-new subsidy policies aligned with national guidance. According to incomplete statistics, as of now, Beijing, Shanghai, Tianjin, Chongqing, Xi’an, Guizhou, and other places have announced relevant subsidy policies.

Data from the Ministry of Commerce show that as of February 16, 2026, the old-for-new policy for consumer goods has benefited 27.556 million people and driven sales of 193.09 billion yuan. Among them, the automotive sector performed particularly well: a total of 607,000 vehicles were exchanged, boosting new car sales by 99.56 billion yuan. In January, the average price of new cars participating in the old-for-new program exceeded 160,000 yuan, a significant increase compared to last year. Meanwhile, the nationwide recycling volume of scrapped vehicles reached 659,000, a year-on-year increase of 50.2%.

“After the holiday, the willingness of new energy vehicle manufacturers to lower prices and promote sales is expected to decline. The weak price elasticity may lead to cautious consumer sentiment, which could temporarily suppress the release of purchase demand,” said the China Passenger Car Association regarding the outlook for the nationwide passenger car market in February. With 16 working days in February, three fewer than the 19 days in February 2025, the effective production and sales period this year is very short. “It can be expected that February’s auto market sales will be at the lowest point of the year, which may help alleviate retail inventory pressure.”