Fuel Car Sales Slide Despite Steep Discounts as NEVs Capture 61.4% Market Share

Recently, China's domestic internal combustion engine (ICE) vehicle market has witnessed widespread price cuts and clearance sales. Prices of many popular models have dropped to historic lows—for instance, the base model of the Honda Civic is now priced at RMB 90,000 for the bare vehicle, the Nissan Sylphy Classic is selling at dealerships for just over RMB 50,000, and the Volkswagen Sagitar has seen its official price reduced to RMB 79,800. Domestic ICE models are commonly offering discounts ranging from 25% to 35%, with some dealers even scrapping traditional warranty period limits and instead providing lifetime powertrain warranties on new vehicles. In April 2026, the average price reduction per ICE vehicle reached RMB 23,000, representing a 17.2% decline. Sales volume that month fell by 37% year-over-year, and cumulative sales from January to April declined by 10% compared to the same period last year. Meanwhile, the new energy vehicle (NEV) market continues to expand rapidly, achieving a penetration rate of 61.4% in April, with sales nearing 850,000 units. Among the top ten best-selling vehicles in April, only one was an ICE model. Driven by rising fuel prices, accelerated substitution by NEVs, and mounting inventory pressures, the wave of price reductions continues to spread across the automotive market. In April, the overall dealer inventory coefficient stood at 1.89, with joint-venture brands reaching a high of 2.24—significantly above the industry’s warning threshold of 1.5. At this pace, NEVs are projected to account for 80% of the market by 2030, further squeezing the ICE vehicle segment into a niche market.