January’s sales tallies from Chinese automakers underline two clear trends: new-energy vehicles remain the engine of growth, and manufacturers are increasingly turning to long-term, low-interest financing to prime demand. Xiaomi Auto announced deliveries of more than 39,000 vehicles for the month, making it the best‑performing “new force” marque in January even as industry leaders from BYD to Geely posted mixed results.
BYD, still the dominant player, reported roughly 210,000 new-energy vehicle sales in January, while Huawei‑aligned HarmonyOS mobility (Hongmeng Zhixing) disclosed deliveries of about 57,900 units. Legacy joint ventures and traditional independent brands performed steadily: GAC Toyota moved about 63,600 units with the Camry and Sienna among the better sellers, and GAC Trumpchi, AITO (Haobo Aion) and Zeekr all registered double-digit growth in the month.
Among the new entrants, Xiaomi’s tally stands out not only for size but for timing. Founder and CEO Lei Jun framed January’s performance as a product‑cycle issue: the older SU7 is being phased out while the YU7 accounted for most deliveries; Xiaomi plans a refreshed SU7 launch in April and has set a 2026 sales target of 550,000 vehicles. Leapmotor (around 32,000 deliveries), Li Auto (27,700), NIO (27,200) and XPeng (over 20,000) round out a cohort of firms that showed year‑on‑year growth amid substantial month‑on‑month declines, a pattern analysts attribute to seasonality and pre‑Chinese‑New‑Year buying dynamics.
Market‑wide metrics paint a softer picture. Industry bodies offered conflicting estimates: the China Passenger Car Association (CPCA) projected retail sales of roughly 1.8 million passenger vehicles in January, down about 20% month‑on‑month but up marginally year‑on‑year; the China Automobile Dealers Association’s half‑month report suggested terminal sales closer to 2.0 million. The discrepancy reflects differing sample windows and highlights how late timing of the 2026 Spring Festival, the tapering of national purchase‑tax incentives and delayed provincial trade‑in subsidies combined to produce cautious consumer behaviour.
Rather than engage in headline price cuts, manufacturers are increasingly deploying financing as a promotional lever. Tesla was first out with a seven‑year “ultra‑low interest” package and was soon followed by Xiaomi, Li Auto, XPeng, Geely and others. Xiaomi’s offer, announced personally by Lei Jun, features seven‑year loans with a headline first payment of CNY 99,900 and monthly instalments as low as CNY 1,931; some OEMs are advertising plans that effectively reduce upfront cost to zero.
The pivot from price competition to extended‑term, low‑rate finance is strategic. It preserves manufacturers’ list prices and brand positioning while expanding affordability by stretching payments. But it also shifts risk onto balance sheets and financing arms, raises household leverage, and may attract regulatory scrutiny if consumer credit quality weakens. Observers note the trend is not new — automakers experimented with long‑tenor deals in 2025 — but its emergence as an industry‑wide default response to soft demand is striking.
For global readers, the takeaway is that China’s auto sector is deepening its reliance on credit‑fuelled demand management even as production and product quality mature. A domestic market that remains resilient — led by BYD’s scale and a crowded field of well‑funded startups — will continue to enable Chinese brands to push harder on export ambitions. Yet if the “financial war” escalates, it could leave OEMs and their captive lenders exposed to higher credit losses and invite tighter oversight from policymakers wary of rising consumer indebtedness.