The Car Was the Dream. Then They Did the Math.

"At first, my budget for a car was 300,000 yuan. Then it dropped to 250,000."

Asked why she was fixed on that price range, Li Yu answered bluntly: "To show off."

Last year, after graduation and in her first few months of work, Li Yu and her boyfriend, Ding Ye, were consumed by the idea of buying a car. At their most enthusiastic, they shuttled between mid- and high-end 4S dealerships in Chongqing and Chengdu, comparing new-car specs, collecting information on nearly new used cars through every channel they could find, and even entertaining the idea of buying two cars, one for each of them.

More than a year into her job, that urge has gone. After a few short-term rental trips and after calculating the costs of commuting, ride-hailing, car ownership and maintenance, the idea simply died.

"Now I think spending that much money on a car just to keep up appearances is unnecessary."

Li Yu is not alone. Her change of heart captures something the auto industry has been slow to admit: young people have not stopped liking cars. Cars have simply moved down the priority list in the real ledger of their lives. The loud youth-oriented pitch from automakers and the actual purchasing power of young people have drifted out of sync.

From "showing off" to "no need to show off"

Li Yu's original car-buying impulse had a strong status component.

She teaches at a school in the suburbs. On weekends, getting home meant a long walk to the bus station, an hour on a coach into the city, then another 40 to 50 minutes on the subway. The commute cost about 700 yuan a month and swallowed a huge amount of time. Her colleagues came from similar backgrounds: locals from Sichuan, only children, overseas study experience, reasonably well-off families. Several who had joined a few years earlier were already driving cars their families had arranged: an Audi Q5L, a Mercedes-Benz C-Class Coupe, a Li Auto.

It got to her.

For a while, Li Yu and Ding Ye spent almost all their free time at dealerships. They started with the AITO M7 because of its driver-assistance system. Then they test-drove the Xiaomi YU7, the Luxeed R7 and the Li Auto i6. Li Yu, who cares first about looks, was won over by the YU7. Ding Ye, more practical, considered the Luxeed R7 a "hexagonal warrior," good at everything. At their most feverish, they talked about buying one car each. More than once, under a salesperson's persuasion, they nearly paid a deposit.

Then the math caught up.

Li Yu seriously considered the Xiaomi YU7, but by then the window for purchase-tax exemption on new energy vehicles had passed. "A standard version plus one color, nothing else added, came to 280,000 yuan, much more than the first batch of owners paid. The first batch got it about 20,000 yuan cheaper. It just felt like a rip-off."

She could afford it. She refused to pay more than someone else for the same product. She mostly buys branded clothing from outlets or through overseas purchasing agents, not from full-price boutiques. With cars, the logic was the same: she wanted the same price other buyers had paid.

When the new-car price did not work, she turned to nearly new used cars. But then the cost of ownership became the problem.

"Once you start working, you learn money is hard to earn. Later, the cost-performance of buying a car just seems too low." After a year at work, Li Yu and Ding Ye ran the numbers again: 5,000 yuan a year for parking, 6,000 for insurance, electricity the cheapest part, maintenance free for two years and then about 1,000-plus a year. Altogether, more than 10,000 yuan a year.

Chongqing also introduced a convenience bus service. Li Yu's weekend trips became much shorter, and her commuting cost fell to about 400 yuan a month. Ding Ye rented a car four times this year: a Nissan NX8 in Chongqing at just over 200 yuan a day; a Deepal S07 in Chengdu at 190 yuan a day; an XPeng G7 at just over 200 yuan a day; and another XPeng G7 using a "rent five days, get two free" coupon at just over 100 yuan a day.

Better transport plus affordable rentals and ride-hailing removed the necessity of ownership. "Now I think spending that much money on a car just to keep up appearances is unnecessary," Li Yu says. "I'll buy a car when I get married, but that's far away. I'm not thinking about it now."

The shift from "to show off" to "no need to show off" is a generation repricing what a car is worth.

In megacities, they can't afford it, or they can't justify it

In China's largest cities, the reasons go deeper.

Lin Han, who has worked in Shanghai for years, and Xiao Nan, in Beijing, have both changed jobs several times since graduation three or four years ago. Lin Han even took on a small debt during a long gap between jobs. When surviving is already a careful calculation, buying and running a car is out of the question. Purchase restrictions and license-plate lotteries also keep them outside the qualified buyer pool.

Li Yu says returning home and striking out in a big city are completely different environments, with different mindsets and different purchasing power. Her university classmate Shen An, a Shanghai local from a well-off family, had also considered buying a car. But traffic congestion, frequent business trips, and the pressure and constraints that come with parents funding the purchase put the plan on hold.

Xiao Zhu, a Zhejiang native working in Shanghai, recently inherited his family's old BMW. But for a young person less than two years into his career, buying a car now still means "first seeing whether I have the money, then maybe my parents chip in a bit, and I cover the rest."

Xiao Zhu did the math carefully. He used to take ride-hailing to work, about 110 yuan a day, but at peak hours supply sometimes fell short, making him late. After switching to driving, parking at his complex costs 20 yuan a day, office parking 56 yuan, and round-trip fuel 30 yuan, roughly the same as his daily ride-hailing spend. What made driving work was that neither his home nor his route fell under traffic restrictions.

He has no plans to switch to a new energy vehicle. His reason: "Domestic new forces focus too much on marketing to one single group. The old BMW 3 Series appealed to everyone. It used the product to attract customers and spoke a common language. Now you see clear polarization: the XPeng MONA series versus the AITO M9. Marketing aimed at specific groups is a product of the hypercompetitive environment. A car shouldn't be a product for a single group. If someone buys an XPeng at 25 and drives it for five years, the car is still in its prime. But by the logic of single-product positioning, it quickly becomes outdated."

Lower-tier cities: family help, but only affordable models

In lower-tier cities, the picture is different, but not necessarily better for automakers' margins.

With lower living costs and family resources behind them, many 25-to-30-year-olds have more money available to buy cars. Running costs are also lower: parking is often negligible, home charging is available, and commercial charging stations charge under 0.7 yuan per kWh. Public transport is less convenient, so a private car is both a practical necessity and a social tool.

When Xiao Cui got engaged last November, he had just turned 25. With his parents' help, he bought a Leapmotor C11 before the engagement. Around the same time, my childhood friend Xuanxuan, back in my hometown, was starting to get her career going. When the family's old Ford was in an accident, she used her savings and her parents' money to buy an XPeng MONA M03.

But even in lower-tier cities, young buyers concentrate on entry-level models. Yiche terminal sales data for the first half of the year shows the top three models in first-tier cities were the Model Y, Xiaomi YU7 and Li Auto i6; in second-tier cities, the Geely Xingyuan, Model Y and Li Auto i6. In third- and fourth-tier cities, the top three were all the Geely Xingyuan, Nissan Sylphy and Volkswagen Lavida. In fifth-tier cities, they were the Xingyuan, Sylphy and Changan CS75 Plus.

J.D. Power data confirms the pattern: buyers born after 2000 account for only 9% of purchases, and more than 70% of those are concentrated below 200,000 yuan. The 100,000-yuan value-for-money small car has become the safer choice. Buyers born after 1995 still make up the largest single age group at 32%, but the youth market as a whole is shrinking.

The data: the youth market has shrunk by a third

A report released in April by the Tengyi Research Institute, "Insight Report on the Female Youth Auto Market (2026 Edition)," shows that from 2020 to 2025, terminal sales contributed by three age groups (under 24, 25–29 and 30–34) fell from more than 10 million vehicles to 7 million, a drop of nearly 33.5%. Over the same period, the overall Chinese auto market held up: in 2025, production and sales grew 10.4% and 9.4% year on year, respectively.

The market's center has shifted. In 2020, young buyers dominated with a 45%–50% share. Now middle-aged buyers dominate at 55%.

This year, the market has contracted further. In the first nine months, retail sales of passenger vehicles totaled 13.334 million, down 21.7% year on year, with a sales profit margin of just 1.4%. In a market this brutal, trying to carve out growth through a youth-oriented strategy and young first-time buyers is unrealistic.

Automakers shout "youth"; middle-aged buyers pay the bills

In the industry's narrative, the most frequently targeted group is young users, especially first-time buyers aged 25 to 35. New forces, joint-venture brands pivoting to electric, and new sub-brands from traditional automakers have all made youth-oriented slogans part of their pitch.

But the problem is straightforward: young people under heavy economic pressure are sharply less willing to buy cars. And when they do buy, they look mostly at the sub-200,000-yuan market, where margins are thin.

Xiao Zhu's observation gets at the weak point of the "youth" narrative: when products are over-segmented and over-labeled, they please one slice of young buyers and leave out the much larger middle-aged replacement market.

Young users are still a good entry point for brand awareness. They understand content, social media and seeding. But if automakers treat 25-to-35-year-old first-time buyers as the base for sales and profit, and keep making products more niche, it will be hard to support scale.

A more realistic strategy: keep youth-oriented communication at the brand level, but shift resources and product focus toward middle-aged replacement buyers. Middle-aged users have replacement demand and stronger purchasing power. They care more about reliability, space, comfort and brand trust. Their social media voices are quieter, but they keep the market upright.

Li Yu still rents cars for road trips to western Sichuan. She is still sensitive to price, still annoyed by the feeling of having paid more than someone else. She is rejecting the premium for appearances, not the car itself.

"I'll buy a car when I get married, but that's far away."

There is no uplift in that sentence. There is one young person's account of where things stand. If automakers cannot hear it, all their talk of "youth" is just talk.