The automotive industry in China faced a challenging start to 2025, with passenger vehicle retail sales declining by 12.1% year-on-year in January. The China Passenger Car Association (CPCA) reported that a combination of factors contributed to the weaker demand, including the La Niña phenomenon bringing warmer and drier conditions, the termination of vehicle scrappage and replacement subsidy policies, and a shorter effective sales period due to the Chinese New Year.
The market saw a significant drop in retail sales for both wholly-owned and joint-venture brands, with mainstream joint-venture brands experiencing a 27% year-on-year decline. Premium vehicle brands also struggled, with retail sales down by 15% year-on-year. Despite the challenges, Geely Auto emerged as the top manufacturer in January, surpassing BYD in retail sales of locally-made passenger vehicles.
On the wholesale front, China’s passenger vehicle manufacturers reported a 0.3% year-on-year decrease in sales volume in January. Wholly-owned brands led the market with a 69% share of domestically built PVs, driven by strong growth in the new energy vehicle (NEV) and export segments. Joint ventures and premium vehicle brands saw declines in wholesale volume compared to the previous year.
In terms of production, China’s passenger vehicle output increased by 3.6% year-on-year in January, with self-owned brands showing a 16% growth compared to the previous year. The country’s PV exports continued to perform well, reaching 380,000 units in January, with NEVs accounting for a growing share of total exports.
Looking ahead to February, the CPCA forecasts steady growth in the PV market, with NEVs expected to be a key driver of sales. The association highlights the importance of policy support, technological advancements, and consumer upgrades in shaping market trends. Balancing development between gasoline and NEV models is also emphasized as a way to stabilize both domestic and international auto sales.
As the automotive industry in China navigates through post-holiday challenges, the focus remains on driving intrinsic market demand and fostering a balanced approach to vehicle sales. With February offering one more working day than the previous year, automakers are gearing up for a potential recovery in the auto market. Stay tuned for updates on the evolving landscape of China’s passenger vehicle market.
