"Two days ago I was laughing at Changan. Now I'm laughing at myself." When rumors that Changan Automobile had scrapped its year-end bonus exploded online, the company quickly issued a stern denial. Yet that top-liked comment made the rebuttal sound thin against a backdrop of industry anxiety.
At the same time, Elon Musk's warning — that the next 3-7 years will be rough, with social unrest, industrial upheaval and bouts of extreme prosperity all unfolding at once — helped cement a harsher consensus: the car industry's hard days have arrived.
Anxiety boils over
The spark behind this storm is worth unpacking. On the eve of the New Year, a post claiming that "an automaker with 3 million annual sales has canceled year-end bonuses" began circulating on social media.
What does 3 million in annual sales really mean?
As of publication day, among 15 automakers that had disclosed annual sales, only BYD, SAIC Motor, FAW Group and Geely Automobile had crossed that threshold. Many others are still hovering near the subsistence line. So if a major manufacturer truly had no year-end bonus, the panic would extend beyond its own staff to countless workers at companies performing far worse.
After Changan's denial, Gasgoo cited multiple people close to the company confirming the final year-end bonus formula: 4.3 months' pay plus 3,000 yuan. The chatter cooled — and with it, the voyeuristic curiosity over how much big factories actually hand out.
Back at Mid-Autumn Festival 2019, Gasgoo even compiled a list of holiday perks at major auto-parts suppliers. It fed cafeteria talk for months — and became a reference for many later job moves.
Now, beyond a muted "envy," there's not much left to say.
During the past golden decade, China's auto market grew at a clip. Carmakers minted profits, holiday perks were generous, and year-end bonuses were a standard perk across the industry. Some even wooed talent with 13th- and 15th-month pay.
Autos were a magnet for job seekers; even staff from internet giants crossed over, prompting veteran auto hands to fret: "Please don't bring your neijuan — the involution — into our industry."
That heady surge rested on three pillars: rapid electrification, a feverish capital market and muscular policy support. Companies raced to raise funds, expand capacity and hire — all to secure seats on the future track. Losses were tolerable; scale was everything.
But as growth cooled, competition turned white-hot and capital became more rational, profitability and cash flow displaced "stories" and "scale" as the only yardsticks that mattered.
The boom has faded, replaced by an endless price war and thinning margins. In 2025, price-cutting was the fiercest on record — running from the year's start to its finish — with more brands involved, deeper discounts and a longer grind than ever before.
Data from the China Passenger Car Association show that from January to November 2025, the average transaction price of new energy vehicles was 204,000 yuan, with average cuts of 24,000 yuan — an 11.7% drop. For conventional gasoline cars, the average cut was 16,000 yuan, down 9%. More than 170 models saw price reductions.
To claw share in a stock market, automakers have had to trade price for volume. That rough-and-ready play, in the end, bites into profits.
Industry margins slid from 7.8% in 2017 to 4.3% in 2024, and held at 4.4% in the first 11 months of 2025. Compared with the 10.2% seen in 2012’s golden era, that’s a shrinkage of almost 60%.
In this environment, cost cuts are inevitable — and employee benefits are among the first targets. Beyond canceling year-end bonuses, many companies have trimmed other perks in the name of "cost reduction and efficiency," even resorting to stealth pay cuts.
So under Gasgoo’s post "Changan rebuts ‘canceling year-end bonus,’ may pay 4.3 months + 3,000," the comments ran with: "These days, a stable job beats anything." "No pay cut is a raise." "A sense of security matters more than the amount."
Winter has arrived
If scrapping bonuses was an early-warning flare, the rolling layoff wave is the cold front itself.
In the first half of 2022, I wrote "Layoff Waves at Big Tech and a Talent Crunch in Autos." As Tencent, Baidu, Alibaba and Meituan streamlined headcount, a flood of talent shifted into the auto sector in search of new opportunities.
Back then, autos still looked like a safe harbor for internet talent.
The reversal came faster than expected. Just two years later, "The Layoff Wave Spreads from Big Tech to Carmakers" drew more than 300,000 reads on a single platform — a gauge of how closely the industry was watching.
One comment from that time stuck: "The wave of job losses hasn’t even started yet."
Now, the answer seems to be coming into focus.
In 2025, even without actively seeking them out — and after some screening — Gasgoo ran more than 70 layoff-related stories. The coverage spanned not only OEMs and suppliers, but chip giants such as Intel and STMicroelectronics, touching virtually the entire auto value chain. In Germany, the scope of job cuts kept widening.
From "no renewal upon contract expiry" — the stealth layoff — to outright headcount cuts, the tools are multiplying and the bite is deepening.
An employee at a domestic parts maker told Yi Nian their department shed one-third of its staff this year. Those who remain carry heavier loads and live with the risk of being next. "I go to work on edge every day, afraid I’ll be the next one ‘optimized.’" His words echo across the workforce.
Before the holiday, a friend asked me to check on a foreign industry giant — the culture, reliability of pay, and how much attention it gives to China. After weighing everything, he chose to keep his head down and stick it out. How long can he hang on? "Maybe another six months," he said; his contract will be up then, and renewal is far from certain.
Can’t hang on, can’t get out, and can’t see the road ahead — that’s where most auto people are. Add a mortgage, a car loan, and parents and kids to support.
Under survival pressure, many swallow their pride and choose to "hang on." But does that really solve anything? Probably not.
As the industry’s transformation deepens, the layoff wave may persist — or even escalate.
The sector once seen as a safe harbor has become a hard-hit zone. Whether a full-blown job-loss wave has arrived — many in the industry already know the answer.
Breaking the involution trap
As the smoke from the price war begins to clear, China's auto industry stands at a turning point. Yesterday’s race for scale brought prosperity; today’s painful adjustments are the rite of passage from quantity to quality.
The engine behind this shift is the twin tide of new energy and intelligent connected technologies.
As Hu Yanping, a distinguished professor at Shanghai University of Finance and Economics, puts it, taming today's competitive distortions requires "looking down" — shoring up the floor for the industry and for consumer confidence.
That "floor" is the baseline for competition, for quality, for safety, and for the Made-in-China brand.
Policy direction is clear. The Ministry of Industry and Information Technology (MIIT) recently emphasized consolidating comprehensive governance against "involution-style" competition, and — with other agencies — accelerating the rollout of mandatory safety standards.
The industry is moving into a new phase of standardization and oversight.
More than 1,800 auto-related standards will be formulated or revised this year, over 100 of them mandatory. Critically, from 2026 three mandatory national standards for intelligent connected vehicles — along with a revised Safety Requirements for Traction Batteries in Electric Vehicles — will take effect.
This isn’t just a rewrite of technical rules; it’s the creation of a fairer, healthier playing field. In parallel come transparent disclosure of vehicle fault and accident data, and robust, diversified third-party testing — together forming the institutional bedrock for high-quality growth.
The deeper transformation is about people.
In late 2025, MIIT and three other ministries issued an Implementation Plan for the Digital Transformation of the Auto Industry, setting targets for 2027: labor productivity per employee up 10% from 2025, and R&D and delivery cycles shortened by 20%.
The core idea is to use digitalization and intelligence to lift value across the supply chain — forging new competitive edges in a stock market.
The implications for the workforce run deep.
Core talent in software, algorithms and the "three electrics" (battery, motor and power electronics) remains in demand — with higher bars and more rational pay. Engineers tied to legacy technologies face urgent reskilling.
An engineer who spent a decade in conventional powertrains told Yi Nian his team is being repurposed. The company offered two choices: leave with compensation, or pay for retraining to switch departments. He chose the latter, starting over alongside graduates ten years his junior. "It’s not that the company is heartless — the age of traditional power really is nearing its end."
Another returnee who came back years ago to help advance combustion engines is simply grateful to be nearing retirement.
This tight coupling — and collision — between personal careers and the industry’s technological wave is a collective experience unique to this generation of auto professionals.
Even as layoffs, pay cuts and "optimization" dominate headlines, another, seemingly contradictory, set of signals is worth watching: BYD is handing targeted raises to R&D staff; CATL plans pay adjustments for frontline employees; Great Wall Motor has adopted full two-day weekends; and Chery has banned Saturday meetings.
These are explicit anti-involution moves. They don’t dodge competition; they signal its evolution — away from brute hours and burn, toward innovation, efficiency and the value of talent. With margins under pressure, such investments suggest the real trump cards are people and ideas.
That aligns with the national push to move from a "big auto country" to a "strong auto country." High-quality development means pivoting from scale and speed to technology, brand and returns.
This shakeout is about eliminating laggards, squeezing out bubbles and optimizing structure. The price war has sped up the rinse, leaving tech-light players struggling to keep up.
The survival rules are now clear. For companies: build vertically integrated core capabilities — BYD’s full-chain moat is one example; craft sharp differentiation, whether in autonomous driving or a niche segment; and go global with conviction to find new growth.
For individuals: embrace the technological shift and turn the "three transformations" — electrification, intelligence and connectivity — into hard skills; broaden your cross-domain lens to become hybrid talent fluent in technology, users and data; and reset your mindset to play the long game in this industry’s crucible era.
Final word:
When the noise of rumor fades, the presence or absence of a year-end bonus isn’t the main issue. What truly sits before every auto professional is an exam about the future.
The industry’s hard days are, at heart, an elimination round — culling backward capacity and outdated skills. Yet they're also a qualifier, handing tickets to the intelligent-electric era to those who embrace change and keep learning.
