OEM Trends
On Jan 27, Zotye Auto announced it had completed early repayment of related debts to the Bank of China's Yongkang branch and China Construction Bank's Yongkang branch. Zotye stated that as of the announcement date (Jan 27), the company had repaid remaining debts of 212,014,262.93 yuan to the Bank of China branch and 172,833,512.50 yuan to the CCB branch. Under the mediation agreement, the company's repayment obligations to both branches have been fulfilled. Additionally, on the same day, Zotye released a notice regarding matured debts. As of that date, the company and its subsidiaries have total outstanding principal debt of 208.92 million yuan.
Recent media reports suggested Li Auto plans to close about 100 underperforming retail outlets in the first half of 2026. On Jan 27, Li Auto responded, stating it will adjust and close a small number of low-efficiency stores this year. The company described this as a normal operational adjustment that will not impact business, dismissing the rumor of closing 100 stores as inaccurate. Li Auto emphasized the move is a reasonable planning of its channel layout based on actual development needs, not a change in its operational status.
XPENG Vice Chairman and Co-President Brian Gu told media in an interview that he expects XPENG to deliver "very strong" growth this year. Gu noted that sales growth in overseas markets could outpace the domestic market. He declined to comment on rumors that XPENG's flying car business will list in Hong Kong this year, but expressed excitement about the "low-altitude economy."
Recently, Li Auto announced that its MEGA model has officially hit 30,000 deliveries, securing the top spot for cumulative sales in the premium MPV segment priced above 500,000 yuan.
BYD Auto Industry Co. recently signed a long-term strategic memorandum of understanding with ExxonMobil China Investment Co. at BYD's Shenzhen headquarters, marking a new phase in their cooperation on new-energy hybrid technology. The two sides will leverage their innovation capabilities in joint R&D and technology transfer, focusing on deepening collaboration in customized product development, technical synergy, joint standard-setting, and brand empowerment, while exploring more opportunities for synergistic innovation in new materials.
Jaguar is exploring the development of hybrid models, a move that could signal a major reversal of the British brand's plans to go fully electric. To alleviate driver concerns about range anxiety on long trips, Jaguar has initiated a secret project requiring engineers to develop hybrid powertrains. Sources familiar with the matter said the technology could boost the range of Jaguar's new models from 700 km to 1,100 km.
Supply Chain News
Recently, the AIBOX high-performance in-vehicle AI computing platform, launched by Huayang General—a wholly-owned subsidiary of ADAYO Huayang Group—secured a project award for a core intelligentization initiative from a leading domestic automaker. The product uses an independent "Box" form factor to provide high-performance AI computing power for vehicles. It works efficiently with cockpit domain controllers and the overall vehicle system, offering a stable and scalable computing foundation for on-device large models.
Michelin's Shanghai factory expansion and renovation Phase II (the White Magnolia Project) officially went into operation at the Minhang Economic and Technological Development Zone. As a major foreign investment project for both Shanghai and Minhang District, the project has a total investment of 3 billion yuan. It marks Michelin Group's first tier-one strategic investment designed, built, and operated systematically under the "Future Factory" concept.
Industrial Economy
On Jan 27, Hong Kong's semiconductor sector rallied, with Shanghai Fudan Microelectronics up nearly 7%, GigaDevice rising more than 4%, Hua Hong Semiconductor gaining over 2%, and SMIC climbing more than 1%.
On Jan 27, Cui Dongshu, secretary-general of the CPCA, wrote that auto production reached 34.78 million units in 2025, a 10% year-on-year increase. Industry revenue hit 11.18 trillion yuan, up 7.1%, while costs rose 8.1% to 9.85 trillion yuan. Profit stood at 461 billion yuan, up just 0.6%. The industry's profit margin of 4.1% remains below the 5.9% average for downstream industrial sectors. Specifically for December, revenue fell 0.8% year-on-year to 1.16 trillion yuan, while costs edged up 0.8% to 1.01 trillion yuan. Profit plunged 57.4% to 20.7 billion yuan, dragging the profit margin down to 1.8%—a sharp drop from November and from the 4.1% recorded in December of the previous year. By the end of 2025, accounts receivable at industrial enterprises above designated size reached 27.43 trillion yuan, up 4.7% from the end of the prior year, while finished goods inventory grew 3.9% to 6.73 trillion yuan. The auto sector's destocking and payment cycle improvements appear to be outperforming the broader industrial sector.
Data from IDC on Jan 27 showed that global battery-electric vehicle sales will surpass 12.1 million units in 2025, maintaining double-digit year-on-year growth. The affordable EV segment is contributing significantly to this expansion. Following the electrification acceleration in the premium market before 2020 and the mid-range market's catch-up between 2021 and 2023, the entry-level market has now become the new core growth driver, fueled by falling battery costs and improved charging infrastructure. IDC's market tracking indicates that innovative technologies typically capture the high-end market first before filtering down to the mass market—a pattern the global auto sector's electrification is following.
Cui Dongshu recently wrote that the pressure on imported vehicles remains severe. Imports totaled just 480,000 units from January to December 2025, a 32% year-on-year drop—a rare significant decline for the full year. In December alone, imports fell 56% to 30,000 units, a 30% slide from November. After peaking at 1.43 million units in 2014, import volumes have been declining. The scale shrank sharply in 2024, with full-year imports reaching only 700,000 units, down 12%.
DeepWay recently completed a Pre-IPO fundraising round, raising a total of 1.18 billion yuan. The round was led by Puhua Capital, with participation from ABC Impact, Sunwoda, Qianhai Haotian, Hantang Properties, Linyi Guoke, Changxing Chuangqiang Fund, Shandong State Holding Capital, Lenovo Capital, Greater Bay Area Fund, Guangyue Investment, and Hongshan Fund. The raised capital will primarily be used for the operation and development of the group's core business.
Policy Situation
The EU announced that under the EU-India agreement, EU service providers will receive preferential treatment in key sectors such as finance and maritime services. Automobile tariffs will be gradually reduced to 10%, with an annual quota of 250,000 vehicles. Tariffs as high as 44% on machinery products, 22% on chemicals, and 11% on pharmaceuticals will largely be eliminated. Tariff restrictions on EU aircraft and spacecraft will be removed for almost all products. Duties on EU optical, medical, and surgical instruments will be lifted for 90% of product categories. Tariffs on EU chemicals will be exempted for nearly all products. Additionally, tariffs on EU wine will drop to 20-30%, spirits to 40%, and beer to 50%.
