By/Lao Wan

A set of mid-October data has reignited industry discussions around the notion of "Golden September and Silver October." According to retail figures released by the China Passenger Car Association (CPCA), national passenger vehicle sales reached 1.618 million units in September, marking a 28% year-on-year decline. Sales of fuel-powered vehicles plummeted by 43% year-on-year, while new energy vehicles (NEVs) also experienced a 16.7% drop. From October 1 to 11, retail sales reached 459,000 units, continuing a 24% year-on-year decline. A survey by the China Automobile Dealers Association (CADA) revealed an even starker reality: 54.2% of dealers reported a significantly weaker peak season effect compared to previous years, 33.7% felt the peak season had largely vanished, and only 3.6% believed performance exceeded prior years. Some have prematurely declared that "Golden September and Silver October" are officially obsolete.

For the past two decades, September and October have been seen as the auto market's harvest period, characterized by manufacturers pushing for volume, dealers chasing rebates, and consumers waiting for price cuts—all synchronized to the calendar. However, a broader perspective reveals that what has collapsed this year is not the "peak season" itself, but the outdated logic that once sustained it. The old model is fading, and a new order is still emerging. Dismissing this transitional phase as the end of the market would be a hasty judgment about China's auto industry.

Let's begin with a fundamental analysis. By September 2025, national passenger vehicle retail sales had surged to 2.241 million units, up 6.3% year-on-year, hitting a new high since the 2017 peak of 2.19 million units. NEV penetration soared to 57.8%, fueled by policy incentives and price stabilization efforts aimed at "avoiding excessive competition." In 2025, trade-in volumes exceeded 11.5 million units, with over half of domestic retail sales participating, effectively condensing one to two years of demand into a single year. This demand was brought forward, and the consequences are now evident. In 2026, trade-in subsidies shifted from fixed amounts to proportional calculations with caps. Industry estimates suggest that average subsidies for scrappage and replacement updates dropped by about 20% and 30%, respectively, compared to the previous year. NEV purchase tax exemptions were also halved from full exemption. With these supports withdrawn and a high base effect lingering, half of the 28% year-on-year decline in September can be attributed to genuine weakness, while the other half reflects the aftermath of last year's overconsumption.

But this is merely the surface. The deeper structural shifts explain why the "peak season" can no longer return.

The first shift is the transition from fuel to electric vehicles, which has eroded the foundation of the traditional peak season. Fuel vehicles once dominated Golden September and Silver October, but in August this year, their retail sales stood at around 540,000 units, down 40% year-on-year. In September, NEV retail penetration hit a record 67%—a figure that, while encouraging, is also a byproduct of the overall market contraction, with fuel vehicles declining even faster. Fuel vehicle consumption follows seasonal patterns, with clear rhythms of pre-Lunar New Year purchases and spring inventory clearance through price cuts. In contrast, NEV consumption is product-driven, with consumers focusing on "when new models will launch" and "when smart driving features will be updated via OTA," rather than specific calendar months. This year, over 90 new models were launched or opened for pre-sale domestically, with nine new models debuting on September 23 alone. When every day feels like "new model day," the uniqueness of "Golden September" fades.

The second shift is the generational change in consumer psychology. McKinsey's 2026 China Automotive Consumer Insights revealed a counterintuitive trend: the proportion of consumers with a negative attitude toward price wars (22.2%) now exceeds those with a positive attitude (16.5%). Repeated price cuts have not spurred buying but have instead reinforced the expectation that "waiting longer will lead to better deals." Consumers are not avoiding car purchases; they are simply extending their decision-making cycles from "placing orders as soon as the peak season arrives" to "waiting for the next price drop." This indicates that China's car-buying population is maturing—they are no longer swayed by marketing rhythms but instead make decisions based on their driving needs, budget constraints, and technological judgments. This is a positive development, even if it disrupts the "concentrated release" dynamic that once defined the peak season.

The third shift is the depletion of channel and profit pools. In September, the dealer inventory alert index reached 63.2%, up 8.7 percentage points year-on-year, while the comprehensive inventory coefficient stood at 1.68, exceeding the warning line of 1.5. By the first half of 2025, the proportion of loss-making dealers had risen to 52.6%, with nearly 1,500 4S stores expected to close net for the full year. Even more striking is the profit distribution: in the first half of 2026, the combined net profit of eight listed power battery companies reached 50.846 billion yuan, while the cumulative profit of 23 mainstream listed automakers was only 25.1 billion yuan—less than half of the former. The average profit margin for battery cell companies was 12.9%, compared to just 3.7% for automakers. Cui Dongshu put it bluntly: automakers outside the battery sector "only account for a single-digit percentage of profits." These numbers may seem stark, but they reflect a necessary correction: the false prosperity built on inventory hoarding, price wars, and financial infusions is being liquidated by the market in the most straightforward way.

If you focus only on "death," you'll miss the other half of the story—growth hasn't disappeared; it has simply relocated. From January to September this year, China exported 8.63 million vehicles, up 52% year-on-year, surpassing the full-year total of 8.32 million units in 2025 in just nine months. In September alone, exports reached 1.182 million units, up 55% year-on-year, with export value growth (54%) outpacing volume growth, indicating a rise in average vehicle prices. Chery exported about 203,800 vehicles in September, BYD about 174,300 (up 151.6% year-on-year), and Geely about 105,900 (up 160.5% year-on-year). In the first half of the year, BYD's overseas revenue reached 181.268 billion yuan, accounting for 52.57% of total revenue, surpassing domestic revenue for the first time; Chery's overseas revenue share was as high as 69.1%. The Leapmotor B10 rolled off the production line at Stellantis' Zaragoza plant in Spain, BYD's Szeged plant in Hungary began mass production in the fourth quarter of this year, and the XPENG G9L launched at MAGNA Steyr's Graz plant in Austria—shifting from "selling cars to Europe" to "building and serving in Europe." Once this step is stabilized, Chinese automakers will no longer rely on thin manufacturing margins but will earn brand premiums instead. This is the path taken by all multinational giants over the past two decades, but this time, the protagonist is China.

The policy steering wheel is also turning. On October 10, four ministries, including the Ministry of Industry and Information Technology, released the Notice on Further Strengthening the Management of Innovative Design, R&D, and Testing Verification of Automotive Products (Draft for Comments), widely interpreted by the industry as a direct challenge to "rushed vehicle development." Almost simultaneously, Toyota's north and south integration (North-South integration in China) landed, with GAC Group planning to acquire a 50% stake in FAW Toyota. On October 12, the Ministry of Finance and the State Taxation Administration announced that starting April 1, 2027, the VAT export rebate rate for NEVs would be lowered from 13% to 9%. These three moves point in the same direction: the old playbook of launching new models hastily, hoarding inventory, racing against time windows, and relying on tax rebates is yielding diminishing returns. The rules are shifting from "who runs the fastest" to "who stands the firmest."

So, how should ordinary consumers interpret this report card? My advice is pragmatic: don't panic over headlines declaring the "death of Golden September and Silver October," nor expect a return of the peak season to bring bargain-hunting opportunities. Instead, this is a rare rational window for car purchases in recent years—fuel vehicles are offering significant discounts to clear inventory, with substantial terminal incentives; NEV options are more diverse than ever, with mature solutions for battery electric, plug-in hybrid, and extended-range models; and dealers, under heavy inventory pressure, are more willing to negotiate than ever before. What you need to do is not wait for the peak season but clarify three things: whether you can install a home charging pile, your annual true driving mileage, and your level of acceptance for smart features. Once you have answers to these three questions, any time is a good time to place an order.

The death of the peak season is, in a way, the market's coming-of-age ceremony. When an industry no longer relies on two months of concentrated bursts to prove itself, when consumers' purchasing decisions are no longer dictated by marketing rhythms, and when profits shift from channel exploitation to technological innovation and brand premiums—that's when the industry truly begins to mature. China's auto market is not declining; it is adopting a healthier, more sustainable way of thriving. What dies is the old calendar, and what grows is the new order. Once you understand this, you'll interpret the current chill in a completely different light.