GTHT: Passenger Vehicle Discounts Continue to Decline in November, Structural Divergence Intensifies

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In November 2025, the average discount rate in China's passenger vehicle market was 18.3%, down 0.3 percentage points month-on-month (MoM) but up 1.0 percentage points year-on-year (YoY), according to data from Dasouche Zhiyun. The average vehicle price remained stable at RMB 159,000 MoM but dropped nearly RMB 9,900 YoY. The cooling trend in discounts, ongoing since the second half of 2025, signals a shift from price wars to refined operations in the domestic passenger vehicle sector.

**New Energy Vehicles Show Stronger Price Stability Than Traditional Fuel Cars** Traditional fuel vehicles maintained a high average discount rate of 26.4% in November, up 0.1 ppts MoM and 2.6 ppts YoY, with an average wholesale price of RMB 164,000 (flat MoM, down RMB 14,000 YoY). In contrast, new energy vehicles (NEVs) saw discounts narrow to 12.2%, declining 0.5 ppts MoM and rising 1.0 ppts YoY, while their average wholesale price held steady at RMB 156,000 (down RMB 5,000 YoY). GTHT notes that NEVs' shrinking discounts and stabilizing prices reflect their cost efficiency and market acceptance, creating room for premium branding and pricing power.

**Divergence Across Brand Categories** Among domestic brands, NEV players like AITO and Leapmotor maintained low discount rates (6.2% and 11.4%, respectively), with further MoM declines, indicating strong demand and pricing control. Non-luxury joint-venture brands (e.g., Volkswagen, Toyota, Honda) faced higher discounts (25%–32%), pressured by NEV competition and domestic brand encroachment.

Luxury brands exhibited stark pricing disparities: Tesla China's discount stood at 4.3%, while traditional luxury marques (Mercedes-Benz, BMW, Audi) offered steep discounts (28%–31%) to boost volume. Second-tier luxury brands (Volvo Asia Pacific, Cadillac) discounted even more heavily. The market is bifurcating into "NEV leaders with pricing power" and "traditional brands trading price for share," a trend likely to deepen with electrification.

**Risks**: Potential shortfalls in new vehicle sales and surges in raw material costs.

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