Cui Dongshu: Strong Overall Trend in China's Auto Market in 2025, Rising Momentum for New Energy Commercial Vehicles

China's auto market has maintained robust growth driven by national policies to boost consumption, with a strong overall trend expected in 2025. The truck and bus markets have shown significant recovery.

Policy incentives have contributed to an 11% growth in passenger vehicle sales, while commercial vehicles, particularly new energy models, have demonstrated notable strength compared to last year. The bus segment, including micro-buses, has achieved solid growth.

In November, new energy vehicle (NEV) sales remained strong, and the auto export market continued to expand. The commercial vehicle sector in 2025 exhibits structural growth driven by equipment renewal subsidies, accelerating electrification in logistics and transportation, leading to high industry sentiment.

1. **Diverging Trends in Passenger and Commercial Vehicles** In recent years, passenger and commercial vehicle markets have diverged, with commercial vehicles weakening while passenger vehicle consumption improved. In 2025, passenger vehicle sales grew by 11%, supported by policy measures, while electrification boosted new energy commercial vehicles. The bus market, including micro-buses, saw strong growth.

The vehicle trade-in policy significantly stimulated passenger vehicle demand, especially during the initial policy rollout. Some regions that had paused the policy have resumed implementation, contributing to a slowdown in overall market growth.

2. **Cooling Auto Market in 2025** From January to November 2025, total auto sales reached 30.94 million units, up 11% year-on-year. November sales stood at 3.42 million units, a 3% increase. Subsidy-driven retail sales surged in the first half of the year, while wholesale growth lagged. Retail growth weakened from July to November, though automakers' sales remained strong.

3. **Significant Divergence Among Major Automakers** Compared with 2021, automakers' performance varied sharply in 2022 due to pandemic pressures and the impact of NEVs. State-owned groups saw mixed results, with GEELY AUTO (00175) and Chery performing well, while FAW, Great Wall, and BAIC faced challenges.

In 2023, NEVs further widened performance gaps. Central state-owned automakers diverged, with some falling behind. BYD (002594.SZ) and Tesla (TSLA.US) performed strongly, while second-tier automakers struggled amid the transition to NEVs and persistent losses.

By 2024, the competitive landscape shifted dramatically. BYD's price cuts and strong demand boosted sales, while SAIC continued to decline sharply. In 2025, private automakers like GEELY AUTO, BYD, Chery, and Great Wall outpaced state-owned players, sustaining high growth.

4. **Passenger Vehicle Production and Sales Trends** From January to November 2025, passenger vehicle sales totaled 26.75 million units, up 11%. November sales reached 3 million units, a 2% increase. NEV innovation and competitive new models drove growth, while traditional fuel vehicle launches lagged.

Post-Chinese New Year in 2025, NEV sales surged, maintaining a 14% growth rate from May to September. Despite a high base in November, passenger vehicle growth remained strong. Domestic automakers led the market, with BYD, GEELY AUTO, and Chery topping sales rankings.

5. **NEV Passenger Vehicle Sales Trends** November 2025 NEV passenger vehicle sales hit 1.71 million units, up 19%. Full-year 2024 sales reached 12.24 million units, a 38% increase. From January to November 2025, wholesale NEV sales totaled 13.77 million units, up 28%.

Subsidies, price cuts, and new models drove growth in the first half of 2025, while exports supported the second half. Leading automakers grew rapidly, with GEELY AUTO, Leapmotor, Chery, Changan, Dongfeng, and Xiaomi performing well in November.

6. **Traditional Fuel Passenger Vehicle Trends** Traditional fuel vehicle sales declined, with 12.98 million units sold from January to November 2025, down 3% year-on-year. November sales fell 14%, highlighting year-end pressure.

7. **Bus Market Trends** From January to November 2025, bus sales reached 830,000 units, up 19%. November sales grew 2%, supported by NEV logistics vehicles. Wuling, Changan, Maxus, and Xinyuan led the segment.

8. **Truck Market Trends** Truck sales in 2025 rose 10% year-on-year to 3.35 million units from January to November. November sales surged 26% to 340,000 units. Heavy-duty trucks, especially pure electric models, saw explosive growth, with Sinotruk, FAW, and Shaanxi Auto performing strongly.