(Yicai) Jan. 12 -- China’s automakers have begun the year with a new round of price cuts in a push to move existing stock, with more than 20 producers offering limited-time discounts on over 70 models.

BMW Group took the lead on New Year’s Day, cutting the prices of 31 models, while Tesla is offering buyers ultra-low interest rates or even interest-free purchase plans. The promotions vary by carmaker. Some are providing cash discounts, some are selling at fixed “one price” rates, while others are providing interest-free loans for three or five years.

BMW's big cuts are not an attempt to trigger a price war, but are aimed mainly at alleviating the cash flow pressure on dealers, Li Yanwei, a member of the China Automobile Dealers Association's expert committee, told Yicai.

Joint venture carmakers, local and foreign brands in the country followed suit, with offers on fuel and new energy vehicle models. For example, FAW Toyota has discounted the Prado by as much as CNY50,000 (USD6,900), while Tesla China launched "seven-year ultra-low interest rate" or "five-year zero-interest" purchase plans.

Most JVs are providing direct cash discounts with relatively deeper reductions, while ocal brands have made more restrained efforts, typically offering additional manufacturer subsidies, interest-free loans, and other commitments to cover the extra 5 percent vehicle purchase tax that buyers should otherwise bear.

China adjusted its NEV purchase tax policy on Jan. 1. The new policy has shifted from the previous full exemption to a 50-percent reduction, which results in a 5 percent tax rate for NEV buyers, with the maximum exemption per vehicle set at CNY15,000 (USD2,070).

Another reason carmakers are promoting sales at the start of the year is to reduce existing inventory. Salespeople from Xpeng Motors and BYD told Yicai that before releasing new models, stores will offer discounts aimed at clearing stocks as soon as possible.

Most of the new models launched after the New Year adopt the competitive strategy of "more features at the same price," they noted. For example, Xpeng released four cars last week, all equipped with its second-generation Vision-Language-Action technology, enabling them to “understand the world and react like a human.” But offering the 2026 models at the same price increases the pressure to discount the unsold 2025 models.

Competition in China's auto market will only intensify through this year, according to a marketing executive at a legacy carmaker.

Editors: Tang Shihua, Martin Kadiev