China’s passenger vehicle market continues to show strong growth, with retail sales reaching 1.826 million units in July 2025. This represents a 6.3% increase year-on-year, although there was a 12.4% decline from the previous month. Despite the month-on-month drop, the cumulative sales for the first seven months of the year stood at 12.728 million units, reflecting a 10.1% increase over the same period last year.
The growth momentum in the market has been steady, with sales increasing from 1.2% in January-February to 10.8% in June. However, the growth slowed in July due to a high comparison base. Nevertheless, the retail sales in July were still 3% higher than the previous record set in July 2023.
One notable shift in the market is a move away from aggressive price-cutting, leading to fewer promotions and more stable pricing. In July, there were fewer models with official price reductions compared to the previous year, indicating a calmer competitive environment. The discount intensity for new energy vehicles (NEVs) remained relatively high at 10.2%, while internal combustion engine (ICE) vehicle models maintained an average discount of 23.4%.
Despite external pressures and domestic challenges, strong countercyclical measures have supported both the economy and the auto sector. China’s GDP grew by 5.3% year-on-year in the first half of the year, fueling robust car sales. Expanded government subsidies under the “Two New” policy have provided a significant boost to the market. However, the pause before the release of the third subsidy tranche and a tightening of local high-interest rebate programs have impacted buyer sentiment, leading to a wait-and-see approach.
In July, China’s self-owned brands accounted for 65.9% of the market share, with sales reaching 1.21 million units. Legacy automakers such as Geely, Chery, Changan, and Great Wall Motor have seen notable market share growth. Mainstream joint ventures sold 450,000 vehicles in July, with German brands holding a 14.5% share.
Premium passenger vehicle sales saw a sharp decline in July, falling to 170,000 units with a market share of 9.3%. The premium segment is facing significant pressure compared to mainstream joint ventures.
Wholesale shipments of passenger vehicles reached a record high in July, with China’s indigenous brands shipping 1.58 million units, mainstream joint ventures selling 440,000 units, and premium brands selling 200,000 units. The wholesale landscape is evolving, with mid-tier players showing strong performance.
In terms of production, China’s passenger vehicle output reached 2.229 million units in July, with premium PV production falling 24% year-on-year. Customs data also shows that China exported 694,000 vehicles in July, with NEVs accounting for a significant portion of the total exports.
Overall, the passenger vehicle market in China continues to show resilience and growth, with various factors influencing sales and production in the sector.
