> **来源：[研报客](https://pc.yanbaoke.cn)** # Auto # 1Q26 carmakers' margins under pressure amid rising discounts We summarize the Feb 2026 price discounts at dealers for major automakers in this report. Note that Feb discounts for each automaker are calculated based on the weighted average of Jan 2026 retail sales volume for each model, as Feb 2026 retail sales volume data have not been released yet. On the surface, China's industrywide average discounts remained flat in Feb 2026 vs. Jan 2026 and Dec 2025 based on our calculations, as narrower discounts for German brands offset wider discounts for other brands. However, it was at the cost of BMW and Mercedes-Benz cutting their manufacturer's suggested retail price (MSRP) substantially for major models in Jan-Feb 2026. Although new orders post Chinese New Year appear to recover at a slower pace than last year based on our channel checks, we believe the 1Q26 weakness for Chinese automakers' profits has been largely priced in, and a plethora of upcoming new models in Mar-Apr could be a positive catalyst for share prices. The NEV trio and Leapmotor. In Feb 2026, Li Auto's average discounts remained flat MoM at $5.3\%$ (Figure 2), lower than 4Q25 amid a higher sales contribution from the low-discount i6 in Jan-Feb 2026. Discount widened by 3ppts for the i8 in Jan-Feb 2026, vs. 4Q25. We expect the discounts for the current L-series to rise in the following months, as the redesigned models are scheduled to be rolled out in 2Q26, starting from the L9. Xpeng's average discounts rose 2.9ppts MoM to $5.7\%$ in Feb (Figure 3) with wider discounts for all the models except the recently launched EREV models. We believe Xpeng now needs a new volume driver, especially as the Mona M03 starts to be aging. New SUVs under the Mona series could be crucial, in our view. NIO's average discounts widened 0.1ppts MoM to $1.6\%$ in Feb (Figure 1), mainly due to higher discounts for the ES6/EC6 and the ET5/ET5T. We expect discounts for these four models to increase in the next few months. The Onvo L90 still offers no discount despite its sales plunge. Leapmotor's average discounts rose 1.1ppts MoM to $8.5\%$ in Feb (Figure 4), mainly due to the C-series. Starting from the launch of the brand-new A10 (small SUV) in Mar, Leapmotor aims to introduce four new models in 2026, start from a small SUV A10 in Mar, which could lead to lower discounts, in our view. Geely. Geely's average discounts at dealers rose 0.8ppts MoM to $13.1\%$ in Feb (Figure 6), the highest at least since 2017, based on our calculations. The Galaxy L7 and A7 PHEVs posted the largest discount increases (nearly 6ppts MoM) last month, likely due to the upcoming launch of their successors, the Galaxy M7 and Xingyao 7 PHEVs. Galaxy brand's rebates for dealers also increased by about 4ppts in Jan-Feb 2026 compared with 4Q25, according to our channel checks. Despite its cost reduction initiatives under the "One Geely" strategy, 1Q26 profitability is likely under pressure, compounded with rising raw material costs. - Great Wall Motor. Great Wall's average discounts at dealers rose 0.4ppts MoM to $13.0\%$ in Feb (Figure 5), as the high-discount Dagou contributed a higher sales portion. Similar to Geely, Haval brand's rebates to dealers rose about 2ppts in Jan-Feb 2026 compared with 4Q25, according to our channel checks, denting profits in 1Q26. Great Wall's first batch of new models this year, including the Wey V9X, Menglong Plus and Tank 700, is scheduled to be rolled out around the Beijing Auto Show in Apr. # OUTPERFORM (Maintain) # China Auto Sector Ji SHI, CFA (852) 3761 8728 shiji@cmbi.com.hk Wenjing DOU, CFA (852)69394751 douwenjing@cmbi.com.hk Austin Liang (852)3900 0856 austinliang@cmbi.com.hk Stocks Covered: <table><tr><td>Name</td><td>Ticker</td><td>Rating</td><td>TP(LC)</td></tr><tr><td>Xpeng</td><td>XPEV US</td><td>BUY</td><td>29</td></tr><tr><td>Xpeng</td><td>9868 HK</td><td>BUY</td><td>113</td></tr><tr><td>Geely</td><td>175 HK</td><td>BUY</td><td>25</td></tr><tr><td>GWM</td><td>2333 HK</td><td>BUY</td><td>20</td></tr><tr><td>GWM</td><td>601633 CH</td><td>BUY</td><td>28</td></tr><tr><td>BYD</td><td>1211 HK</td><td>BUY</td><td>125</td></tr><tr><td>BYD</td><td>002594 CH</td><td>BUY</td><td>125</td></tr><tr><td>GAC</td><td>2238 HK</td><td>BUY</td><td>4.3</td></tr><tr><td>GAC</td><td>601238 CH</td><td>BUY</td><td>10</td></tr><tr><td>Leapmotor</td><td>9863 HK</td><td>BUY</td><td>73</td></tr><tr><td>Yongda</td><td>3669 HK</td><td>BUY</td><td>2.5</td></tr><tr><td>Meidong</td><td>1268 HK</td><td>BUY</td><td>2.8</td></tr><tr><td>Tuhu</td><td>9690 HK</td><td>BUY</td><td>23</td></tr><tr><td>Minth</td><td>425 HK</td><td>BUY</td><td>42</td></tr><tr><td>Zenergy</td><td>3677 HK</td><td>BUY</td><td>18</td></tr><tr><td>EVA</td><td>838 HK</td><td>BUY</td><td>1.3</td></tr><tr><td>Li Auto</td><td>LI US</td><td>HOLD</td><td>18</td></tr><tr><td>Li Auto</td><td>2015 HK</td><td>HOLD</td><td>70</td></tr><tr><td>NIO</td><td>NIO US</td><td>HOLD</td><td>6.4</td></tr><tr><td>NIO</td><td>9866 HK</td><td>HOLD</td><td>50</td></tr></table> Source: Bloomberg, CMBIGM Related Reports: "China Auto Sector - Eyes on new models from Mar after a weak start" – 2 Mar 2026 BYD. BYD's average discounts at dealers remained largely flat MoM at $7.0\%$ in Feb (Figure 7), which made BYD's rebates to dealers largely flat in Jan-Feb 2026 compared with 4Q25, according to our channel checks. It appears to us that BYD has put a higher priority on pricing stability than sales volume growth since 3Q25. The company is to showcase the 2nd-generation blade battery and flash charging technologies on 5 Mar 2026, which are expected to be equipped on more new models. The ADAS and flash charging features unveiled last year did not aid BYD's sales volume much, which could be a hard lesson for BYD when launching new technologies this year. We are of the view that pricing is still the key to BYD's target customers. GAC Group. GAC Trumpchi's average discounts at dealers rose 2.8ppts to $17.6\%$ in Feb 2026 compared with Dec 2025 (Figure 8), partly due to a higher sales contribution from the high-discount GS3. GAC Aion's average discounts at dealers rose 2.3ppts to $10.2\%$ in Feb compared with Dec 2025 (Figure 9), driven by the Aion Y and i60. Aion's retail sales volume continued to be volatile. Discounts at GAC Toyota rose 2.1ppts to $20.3\%$ in Feb compared with Dec 2025 (Figure 10), driven by the Frontlander, Wildlander and bZ3X EV. Discounts for the bZ3X EV have widened to about $7\%$ since Jan 2026 compared with almost null on average in 2025. GAC Honda's average discounts rose 0.6ppts to $24.9\%$ in Feb compared with Dec 2025 (Figure 11), a record high again. The Accord and Breeze contributed over $80\%$ of GAC Honda's retail sales volume in Jan 2026. BMW Brilliance. Discounts at BMW Brilliance further narrowed to $25.3\%$ in Feb 2026, 4.2ppts lower than Jan 2026 and 7.8ppts lower than Dec 2025 (Figure 12). BMW cut MSRPs of almost all the major models by about RMB60,000 from Jan 2026. That, along with slightly increased transaction prices, could turn BMW dealers' new-car gross margin (including commissions from auto finance and insurance) to positive territory, based on our estimates. We believe that a significant portion of BMW dealers made a net loss last year, as we estimate the average new-car gross margin (including commissions from auto finance and insurance) was about $-2\%$ in 2025, despite year-end special subsidies. That was one of the important reasons why BMW dealers raised transaction prices at the beginning of 2026 in a bid to revive profits. However, such trend could be short-lived, as new orders for BMW fell $15 - 20\%$ YoY in the first two months based on our channel checks and stiffer competition from NEV makers could place an extra burden on BMW. ■ Beijing Benz. Similar to BMW Brilliance, discounts at Beijing Benz also fell by 5.1ppts MoM in Feb 2026 (Figure 13). Mercedes-Benz followed suit by cutting MSRPs for the C-Class, GLB and GLC by RMB33,700-62,500 from Feb 2026. We expect the margin lift for Mercedes-Benz dealers to be milder than that for BMW dealers, as these three models account for about $45 - 50\%$ of Mercedes-Benz's total retail sales volume. Transaction prices for these three models remained at similar levels after the MSRP cuts. Figure 1: NIO's discounts Source: ThinkerCar, CMBIGM Figure 2: Li Auto's discounts Source: ThinkerCar, CMBIGM Figure 3: Xpeng's discounts Source: ThinkerCar, CMBIGM Figure 4: Leapmotor's discounts at dealers Source: ThinkerCar, CMBIGM Figure 5: Great Wall Motor's discounts at dealers Source: ThinkerCar, CMBIGM Figure 6: Geely's discounts at dealers Source: ThinkerCar, CMBIGM Figure 7: BYD's discounts at dealers Source: ThinkerCar, CMBIGM Figure 8: GAC Trumpchi's discounts at dealers Source: ThinkerCar, CMBIGM Figure 9: GAC Aion's discounts at dealers Source: ThinkerCar, CMBIGM Figure 10: GAC Toyota's discounts at dealers Source: ThinkerCar, CMBIGM Figure 11: GAC Honda's discounts at dealers Source: ThinkerCar, CMBIGM Figure 12: BMW Brilliance's discounts at dealers Source: ThinkerCar, CMBIGM Figure 13: Beijing Benz's discounts at dealers Source: ThinkerCar, CMBIGM # Disclosures & Disclaimers # Analyst Certification The research analyst who is primary responsible for the content of this research report, in whole or in part, certifies that with respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report. 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