TrendForce: Estimated global new car market to grow by 2.4% annually in 2025, competition in "smartization" may intensify

According to the latest estimates from TrendForce, the global new car market sales volume in 2025 will be 90.6 million units, with an annual growth rate of 2.4%. Among them, China has the highest market share at 29%, followed by the United States at 18%, and Western Europe at 15%. The competition for "smartification" in the Chinese market is expected to intensify. TrendForce also stated that the automotive industry supply chains of the United States, Canada, and Mexico are highly interdependent. Considering factors such as geographical location, production costs, and the USMCA agreement, over ten global automakers have chosen to establish factories in Mexico. There are over 30 various types of car assembly plants in Mexico, with as many as several hundred component factories in the vicinity. As a response to the new US tariff policies, although car plants can transfer capacity, it is difficult to move all production out of Mexico. Additionally, components also face tariffs, making it impossible for car plants to completely avoid the impact of tariffs and the resulting cost increases, leading to an increase in vehicle prices. TrendForce's analysis suggests that if the US imposes a 25% tariff on imports from Mexico and Canada, the high car prices will prompt consumers to delay purchasing new cars or turn to leasing or the second-hand market. It is estimated that the US car sales in 2025 will switch from an annual increase of 1% to an annual decrease of 3%. However, tariff rates are not the only factor affecting new car sales, as the final tariff conditions, implementation timing, interest rate reductions, inflation trends, car plant responses and strategies, among others, will also impact the estimated values of new car sales. In the Chinese market, which has the largest share of new car sales, fiscal measures related to automobiles will drive sales in 2025. In addition to extending subsidies for replacing old vehicles, the subsidies' recipients and scope will be expanded, therefore, it is expected that the Chinese market will still have the opportunity to maintain positive growth this year. TrendForce estimates that by 2025, the market share of new energy vehicles in the Chinese new car market will reach 50%. With high sales bases, car manufacturers will not only compete on price discounts but also on the integration of smart functions, which will become an important factor in attracting consumers. Leading car manufacturer BYD Company Limited has launched the concept of "equal rights for smart driving," by incorporating smart driving features into affordable car models, not only speeding up the popularization of intelligent vehicle functions in China but also further enhancing the competitiveness of the local smart car supply chain.