China Passenger Car Association: 1.794 million cars were retailed in the national passenger car market in January, a year-on-year decrease of 12.1%.

According to the data from the China Passenger Car Association, in January 2025, the national retail sales of passenger cars were 1.794 million units, a decrease of 12.1% year-on-year and a decrease of 31.9% month-on-month. Retail sales in January were at a historical low, and the 31.9% month-on-month decrease was only second to the 41% decrease in January 2023. 1. Review of the National Passenger Car Market in January Since the onset of winter, the eastern region of China has been experiencing abnormal weather conditions due to the appearance of the La Nia phenomenon, with significantly less precipitation and higher temperatures, resulting in weaker demand for car use. As the annual policy on scrappage and replacement of vehicles came to an end in 2024, the car market in January 2025 continued to benefit from related policies, with the transitional period in January being the best time to enjoy car purchase subsidies for the year 2025. However, with the early arrival of the Spring Festival, many consumers completed their replacement vehicle purchase plans before the end of 2024, making the car market slightly weaker in January compared to previous years, also due to the fact that January had more than 4 days less in effective sales time. Therefore, the negative retail growth in January was as expected. Considering factors such as the transportation cycle before the Spring Festival, the period before the Spring Festival in previous years has been a low production and sales period for manufacturers, with strong retail sales and lower inventory levels forming a period of strong inventory clearance. This year, due to the high base in January before last year's Spring Festival, in order to achieve steady economic growth for local economies, some manufacturers will consider transferring a certain volume after adjusting their targets in 2024 to ensure a strong start in January 2025. Characteristics of the passenger car market in January 2025: 1. Wholesale, production, and exports are all at historical lows. Retail sales in January have been higher only than the January retail sales in 2020 and 2023 in the past 10 years, and the potential for a "low opening and high growth" in 2025 is enormous; 2. Independent brands account for over 68% of wholesale market share and over 61% of retail market share in January. The independent brands have shown an increase of 8 and 6 percentage points respectively compared to last year. The overall lead of independent brands reflects their continued innovation in product and channel management, gaining further support and recognition from consumers in 2025; 3. The price war is stabilizing, with moderate price promotions in January. Despite the high volume of price promotions, due to the strong retail sales since the fourth quarter of 2024, the pricing promotion is in good shape; 4. Passenger car exports reached 380,000 units, a 3% year-on-year increase, with a significant slowdown in growth; 5. The inventory reduction characteristics before the Spring Festival were not prominent in January, with a 10,000 unit increase in manufacturer inventory and a 70,000 unit reduction in channel inventory. The significant decrease in fuel vehicle inventory was due to the unstable distribution system; 6. Domestic retail sales of new energy vehicles reached 744,000 units in January, an increase of 10.5%, maintaining good growth. Since the period around the Spring Festival is a peak buying period for county and township markets, the demand for new purchases is higher, with a higher proportion of fuel vehicles. A low penetration rate of new energy vehicles in January is a normal seasonal pattern; 7. Independent car companies have quickly become the absolute main force, with BYD Company Limited, Geely, Chery, and Changan continuing to hold the leading position. The market share of manufacturers increased from 38% in the previous year to 46% in January 2025, representing the successful transformation of traditional independent companies into new energy vehicles; 8. The high-end transformation of independent passenger cars is significant, with independent brands over 200,000 yuan accounting for 37% in January 2025, up from 32% in 2024. However, the current rate of car ownership is still relatively low worldwide, requiring the promotion of low-priced products to drive accessibility, with the need for independent brands to focus on development at the low-end; 9. SUVs continued to show strong growth, accounting for 50% of domestic retail passenger car sales in January. SUVs accounted for 49.5% of domestic retail sales of new energy vehicles in January, and 62% of new energy vehicle exports in January. In January, retail sales of independent brands reached 1.09 million units, a decrease of 2% year-on-year and a decrease of 33% month-on-month. The market share of independent brands in domestic retail sales reached 61% in the month, an increase of 5.9 percentage points year-on-year. The wholesale market share of independent brands in January was 69%, an increase of 8 percentage points compared to the same period last year; independent brands saw significant increases in the new energy and export markets. The top traditional car companies performed excellently in their transformation and upgrading efforts, with brands such as BYD Company Limited, GEELY AUTO, Chery, and SAIC WULING MOTORS showing clear increases in market share. In January, retail sales of mainstream joint venture brands reached 490,000 units, a 27% year-on-year decrease and a 30% month-on-month decrease. German brands accounted for 18.4% of January retail sales, a decrease of 0.7 percentage points year-on-year, while Japanese brands accounted for 13.4%, a decrease of 3.3 percentage points year-on-year. American brand market share reached 5.3% in January, a decrease of 1.1 percentage points year-on-year. Luxury car retail sales reached 210,000 units in January, a 15% year-on-year decrease and a 28% month-on-month decrease. The market share of luxury brands in January was 11.6%, a decrease of 0.4 percentage points year-on-year, with traditional luxury car markets performing relatively well. Exports: Overall automobile exports continued the strong growth trend from last year. Data from the China Passenger Car Association showed that in January, passenger car exports (including complete vehicles and CKD) reached 380,000 units, a 3% year-on-year increase, and a 6% month-on-month decrease. New energy vehicles accounted for 35.9% of total exports in January, an increase of 7.5 percentage points compared to the same period. Independent brand exports reached 328,000 units in January, an 8% year-on-year increase, and a 9% month-on-month decrease; joint venture and luxury brand exports reached 60,000 units, a 19% year-on-year decrease. Production: Passenger car production reached 2.107 million units in January, a 3.6% year-on-year increase and a 28.2% month-on-month decrease. January's passenger car production was only 19,000 units lower than the historical peak in 2018, and given the strong production performance considering the Spring Festival, it made a significant contribution to local economic growth. Luxury brand production in January decreased by 17% year-on-year and decreased by 4% month-on-month; joint venture brand production decreased by 13% year-on-year and decreased by 26% month-on-month; independent brand production increased by 16% year-on-year and decreased by 32% month-on-month. Wholesale: In January, national passenger car manufacturers wholesaled 2.101 million units, a 0.3% year-on-year decrease, and a 31.6% month-on-month decrease. Due to less inventory clearance in the distribution channels, the year-on-year growth rate of passenger car wholesale in January was 12 percentage points higher than the retail growth rate. Independent car manufacturers wholesaled 1.445 million units in January, a 14% year-on-year increase, and a 29% month-on-month decrease. Mainstream joint venture car manufacturers wholesaled 440,000 units, a 24% year-on-year decrease and a 40% month-on-month decrease. Luxury car wholesale in January was220,000 vehicles were sold, a decrease of 19% year-on-year and a decrease of 32% month-on-month.In January, the overall wholesale performance of mainstream passenger car manufacturers was mixed, with GEELY AUTO, Chery Automobile, Chongqing Changan Automobile showing strong year-on-year and month-on-month performance. In January, there were a total of 5 passenger car manufacturers with sales of over 100,000 units (down from 9 in December and the same as last year), accounting for 53% of the overall market share. Among the 33 passenger car manufacturers with wholesale volume of over 10,000 units, 5 showed month-on-month positive growth, with 5 of them showing an increase of over 10%, indicating a relatively strong performance by major independent manufacturers. Inventory: Due to strong production by manufacturers in January and strong wholesale efforts, manufacturers produced 0.6 million more vehicles than they wholesaled, while monthly domestic wholesale by manufacturers was 70,000 units lower than retail. Manufacturer inventories increased by 10,000 units in January (down 70,000 units compared to the same period last year). Overall domestic channel inventory of passenger cars decreased by 70,000 units (down 320,000 units compared to the same period last year), leading to a significant increase in wholesale growth over retail by 12 percentage points. New Energy Vehicles: In January, the production of new energy passenger cars reached 940,000 units, an increase of 25.8% year-on-year but a decrease of 35.1% month-on-month. In January, the wholesale sales of new energy passenger cars reached 889,000 units, an increase of 27.1% year-on-year but a decrease of 41.2% month-on-month. In January, the retail sales of new energy passenger cars reached 744,000 units, an increase of 10.5% year-on-year but a decrease of 42.9% month-on-month. In January, 139,000 new energy passenger cars were exported, an increase of 29.4% year-on-year and 13.9% month-on-month. In terms of wholesale in January, the penetration rate of new energy vehicles by manufacturers was 42.3%, up 9 percentage points from January 2024. In January, the penetration rate of self-owned brand new energy vehicles was 54%; luxury new energy vehicles 34%; and mainstream joint venture brand new energy vehicles only 2%. In January, pure electric vehicle wholesale sales were 518,000 units, an increase of 23.3% year-on-year but a decrease of 41.6% month-on-month; narrow plug-in hybrid sales were 298,000 units, an increase of 51.3% year-on-year but a decrease of 40.3% month-on-month; extended-range wholesale was 73,000 units, a decrease of 11.3% year-on-year and 41.7% month-on-month. In January, the wholesale structure of new energy vehicles was 58% pure electric, 34% narrow plug-in hybrid, and 8% extended-range, compared to January 2024 where it was 60% pure electric, 28% narrow plug-in hybrid, and 12% extended-range. In terms of the overall wholesale structure for new energy vehicles in 2024, it was 58% pure electric, 32% narrow plug-in hybrid, and 10% extended-range, with recent narrow plug-in hybrid sales growing significantly faster than extended-range vehicles. In January, B-class electric car wholesale sales were 196,000 units, an increase of 32% year-on-year but a decrease of 36% month-on-month, accounting for 38% of the pure electric market share. The A00+A0 level economy electric car market performed well, with wholesale sales of 117,000 units for A00 level, an increase of 36% year-on-year but a decrease of 32% month-on-month, accounting for 23% share of pure electric vehicles, a 2 percentage point increase from the same period last year; A0 level wholesale sales of 108,000 units, accounting for 21% share of pure electric vehicles, a 1 percentage point increase year-on-year; A-level electric car sales of 89,000 units, accounting for 17% share of pure electric vehicles, a 5 percentage point decrease year-on-year, showing differentiation in sales volume by level and a clear trend towards high-end consumer upgrades. In January, there were 22 models of passenger cars with wholesale sales exceeding 20,000 units (down from 36 last month), including BYD's Song (83,824 units), Seagull (41,212 units), Changan CS75 (37,881 units), Model Y (32,233 units), Model 3 (31,005 units), Star Yue (29,995 units), Sagitar (28,326 units), Sylphy (28,160 units), GEELY Star Wish (28,147 units), Tiggo 8 (27,556 units), Boyue (26,434 units), Yidong (24,161 units), Xingrui (23,818 units), Xiaomi SU7 (22,897 units), Hong Guang MINI (22,637 units), Sea Lion 06 (22,245 units), La Passat (21,546 units), Jietu X70 (21,027 units), Jetta (20,921 units), X70 (20,679 units), BYD's Qin (20,377 units), and Starship 7 (20,330 units). Among them, new energy models ranked in the top two in overall passenger car model sales, and before the Spring Festival, Changan CS75, Star Yue, Sagitar, Sylphy and other mainstream fuel vehicle models performed very well domestically. Retail: In January, the domestic retail penetration rate of new energy vehicles was 41.5%, an increase of 9 percentage points from the same period last year. In January, the domestic retail penetration rates of new energy vehicles were 60.6% for independent brands, 20% for luxury brands, and only 3% for mainstream joint venture brands. Looking at the monthly domestic retail market share, the share of mainstream independent brand new energy vehicles in January was 72%, a decrease of 0.2 percentage points year-on-year; joint venture brand new energy vehicles had a share of 2.1%, a decrease of 2.9 percentage points year-on-year; new force accounted for 20.8%, with brands like Xiaomi Cars driving a 5.7 percentage point increase year-on-year; Tesla had a share of 4.5%, a decrease of 1.4 percentage points year-on-year. Exports: In January, 139,000 new energy passenger cars were exported, an increase of 29.4% year-on-year and 13.9% month-on-month. This accounted for 36.6% of passenger car exports, an increase of 8 percentage points from the same period last year. Pure electric vehicles accounted for 66% of new energy exports, with A0+A00 level pure electric exports accounting for 38% of new energy exports (36% in the same period last year). With the emergence of the scale advantage of Chinese new energy brands like CXBQ, more and more Chinese-made new energy products are being exported and gaining recognition overseas. Despite some recent disturbances from foreign countries, the export of independent plug-in hybrids to developing countries is growing rapidly, showing a bright future. Excellent enterprises in terms of exports in January were: BYD Company Limited (66,336 vehicles), Tesla China (29,535 vehicles), Chery Automobile (8,662 vehicles), Chongqing Changan Automobile (4,404 vehicles), Dongfeng Automobile (3,546 vehicles), G...EELY AUTO (3495 vehicles), SAIC-GM-Wuling (3006 vehicles), Great Wall Motor (2878 vehicles), SAIC passenger vehicle (2852 vehicles), Volvo Asia Pacific (2501 vehicles), JiXing Auto (2380 vehicles), LEAPMOTOR (2166 vehicles), Xiaopeng Auto (2010 vehicles), GAC Environ-mental(1618 vehicles), FAW Hongqi (882 vehicles), Zhimada Auto (619 vehicles), Huachen BMW (538 vehicles), Jiangsu Yueda Kia (514 vehicles), SAIC Maxus (386 vehicles), NIO Auto (364 vehicles). Other new energy vehicle exports also have a certain scale. From the monitoring of overseas market retail data of self-owned brands, A0-class electric vehicles accounted for nearly 50%, which is the absolute main force for self-owned exports. SAIC and other self-owned brand compact electric vehicles performed strongly in Europe in the early stage, but recently faced corresponding targeted tax measures. This also reflects that micro electric vehicles are the core of world electric vehicle competition, urgently needing financially tax policies and supporting policies such as the C7 driver's license to guide the development of small electric vehicles and encourage the development of micro electric vehicles, so that Chinese electric vehicles can sustainably go global. As a category of fuel vehicles corresponding to pure electric zero carbon models, in the competition in the overseas fuel vehicle market, self-owned hybrid vehicles rely on the advantages of low fuel consumption and long range to increasingly stand out in diverting fuel vehicles in overseas markets.4) Vehicle companies: The overall trend of new energy passenger vehicle companies in January was strong, with BYD Company Limited solidifying its leading position in the new energy market with pure electric and plug-in hybrid dual drive; Narrow hybrid vehicles represented by BYD Company Limited vehicles, GEELY AUTO, and Chery Automobile continued to perform strongly. In terms of product deployment, with the implementation of the "multiple approaches" strategy of independent car companies in the new energy route, the market base continues to expand, and 14 manufacturers with monthly wholesale sales of new energy vehicles exceeding 10,000 vehicles (4 fewer than the previous year, 6 fewer than the previous month), accounting for 95% of the total new energy passenger vehicle volume (94.2% the previous month, 90% the same period last year). Among them, BYD Company Limited vehicles (296,446 units), GEELY AUTO (121,071 units), Chongqing Changan Automobile (67,803 units), Tesla China (63,238 units), Chery Automobile (55,028 units), SAIC-GM-Wuling (35,809 units), Xiaopeng Motors (30,350 units), IDEAL Automobile (29,927 units), LEAPMOTOR (25,170 units), Xiaomi Automobile (22,897 units), Great Wall Motor (22,253 units), Chongqing Sokon Industry Group Stock Automobile (16,408 units), Dongfeng Motor (14,777 units), NIO (13,863 units). 5) New forces: In January, the market share of new forces was 20.8%, an increase of 5.7 percentage points compared to the previous year; Xiaopeng Motors, IDEAL Automobile, LEAPMOTOR and other car companies showed overall strong year-on-year and month-on-month sales performance. Independent mainstream car companies are increasingly strong in new energy, with BYD Company Limited vehicles, GEELY AUTO, SAIC-GM-Wuling, Chongqing Changan Automobile, Chery Automobile showing strong annual performance but actively contracting in January. 6) Conventional hybrid: In January, wholesale sales of conventional hybrid passenger cars were 74,000 units, an increase of 13% year-on-year and a decrease of 33% month-on-month. Among them, Guangqi Toyota (33,208 units), FAW Toyota (25,551 units), Changan Ford (4,588 units), Dongfeng Honda (4,004 units), Guangqi Honda (2,280 units), Dongfeng Motor (1,532 units), GAC Trumpchi (1,245 units), Dongfeng Nissan (655 units), GEELY AUTO (505 units), the sales volume of hybrid independent brands gradually increased. 2. Outlook for the national passenger car market in February There are 19 working days in February 2025, one more day than in February last year, and the implicit early holiday before the Spring Festival was in January. Due to intense market competition, most manufacturers are working hard to resume operations after the holiday. Therefore, there is great potential for market recovery in February. With the gradual release of the policy of replacing old cars with new ones in some regions, the car market enters a period of post-holiday recovery. As the policy subsidies during the transition period before the release of new policies in January were relatively strong, the market in February mainly relies on its own demand for recovery. Since the end of the good days of supply and demand imbalance in the global automotive industry in 2023, price wars were the most intense in 2023, and the price war in February 2024 started early, was intense, and lasted a long time, temporarily restraining the sales of the automotive market, forming a U-shaped trend for the year with a "pre-holiday high, spring low, and strong end of the year". The strength of car companies participating in price wars in the automotive market has shown a weakening trend this year, but with PPI continuing to be low and upstream profits being prominent, there is still potential for a continued price war in 2025. As the new policies of the US government are being implemented, the world economy and trade are in a more turbulent environment, with increased pressure on trade balances. After the Spring Festival, production and export operations of various industries gradually recover, and the complexity of the external environment promotes the transformation of domestic consumption demand, creating more opportunities in regional markets. The scale of people returning home for the Spring Festival is large this year, and the pace of post-holiday work resumption is relatively fast. Some middle-aged and elderly migrant workers are gradually considering local employment and entrepreneurship, which will bring certain benefits to the car market after the Spring Festival. It is expected that the sales volume of passenger cars in China in February 2025 will continue to grow steadily, with new energy vehicles becoming the main drive, while the traditional fuel vehicle market continues to shrink. Policy support, technological progress, and consumption upgrades will be key factors driving market development, and reducing discriminatory policies against fuel vehicles will have a better impact on stabilizing domestic and foreign car sales. Currently, according to the policy of replacing old cars with new ones in 2024 in various regions and based on the calculations continued according to the new standards, it is estimated that domestic car retail sales in 2025 will reach 23.4 million units, a 2% increase, with new energy passenger car retail reaching 13.3 million units, a 20% increase, with a penetration rate of 57%.