MNI INTERVIEW: China Car Sales To Grow 2%, Exports Slow
MNI (BEIJING) - Domestic retail sales of passenger vehicles are expected to increase 2% y/y to 23.4 million units in 2025, slower than 2024’s 5.7% growth, with weakness felt most over Q1, a Chinese auto-industry expert told MNI, noting new energy vehicle (NEV) sales will increase their market share significantly.
"This year's sales growth rate will slow down as subsidy effectiveness slightly weakens from last year," said Cui Dongshu, secretary general at the Car Passenger Association in China.
Seasonal factors in Q1 will push sales lower before fiscal supports, such as the trade-in scheme and favourable tax policies, lead to a rebound later in the year, he added.
“Preliminary projections show overall retail sales in January are expected to be around 1.75 million units, down 14.6% y/y and 33.6% m/m, due to the market entering a policy-transition period and Chinese new year,” Cui continued.
China’s National Development And Reform Commission announced earlier this month the government would continue offering a subsidy of CNY20,000 to trade-in old cars for an NEV, and CNY15,000 for a fuel based vehicle, unchanged from last year’s amount.
Cui sees new EV sales will account for 57% this year, up over 10 percentage points from 2024, with 13.3 million units sold – a 21% increase from last year.
EXPORTS
Total automobile exports, which increased 23% to 6.4 million units last year, will slow to 10% y/y growth in 2025 as Russian demand declines and the EU exerts greater tariff pressure, Cui argued.
NEV exports will likely hold flat from 2024's 1.29 million units, which was a 24.3% increase over 2023 levels, Cui added.
Zhang Yunming, vice minister at the Ministry of Industry and Information Technology, noted recently the government was aware the nation’s NEV industry faced intensified domestic competition and high international trade barriers this year, and would implement trade-in and tax exemption policies to expand consumption.