In the first half of 2025, the Chinese auto market showed a complex pattern of quantitative and qualitative differentiation and diversified game. The "two new" policies accurately stimulate the vitality of domestic demand, and domestic sales in the auto market achieved an unexpected growth; export growth rate slowed down, and plug-in hybrid products became a new round of export growth engine. In market competition, the leading joint venture car companies rely on the stable fuel base, combined with intelligent upgrades and service equity optimization to stabilize sales; independent brands are centered on new energy, and domestic and overseas dual-wheel drive has achieved outstanding results. The industry ecology is becoming healthier, shifting from inverse to standardized development: Automobile companies have promised to shorten supplier accounting periods and the "high interest rate and high return" model in the financial field has been rectified, promoting the industry to move from disorderly competition to a new stage of sustainable development.

Based on the performance of the auto market in the first half of 2025, in order to better see the subsequent auto market development in 2025, Gastron Automobile Research Institute completed the "2025 H1 Passenger Car Market Summary and Outlook Report", focusing on three aspects: macroeconomic and auto market characteristics analysis, passenger car market review in the first half of the year, and future trend outlook. The main views of the report are as follows:

Analysis of macroeconomic and auto market characteristics

GDP grew by 5.3% year-on-year in the first half of the year, achieving exceeding expectations. This achievement stems from the dual support of "policy coordination + market resilience". On the policy side, consumption stimulus policies promote the exchange of old cars and home appliances, driving the year-on-year growth of social retail sales by 5.0%, and contribute 52% to economic growth. At the market level, in the face of trade frictions, foreign trade resilience has become prominent, exports have increased by 7.2% year-on-year, contributing to GDP growth to 31.2%, and exports have hit a record high in the same period in history. Looking ahead to the full year of 2025, it is expected that the global economy will have great downward risks in trade frictions, policy uncertainty and technological changes, and China's economy will continue to grow steadily in policy support and market resilience.

The industry is fierce, the inversion is serious, and the price war continues. The industry profit margin in the first half of 2025 was 4.8%, of which it once fell to 4.1% from January to April. The automobile industry shows that revenue increases but profits are not increased. The profitability of the automotive industry and upstream and downstream of the industrial chain has deteriorated, and the shutdown and rotation have continued to intensify. According to statistics, more than 400 car companies went bankrupt from 2017 to 2025, and more than 4,400 downstream dealers withdraw from the network in 2024. The automotive industry is in an extremely unhealthy state.

As the competition in the auto market is intensifying, many departments have upgraded technical safety standards and product access supervision by introducing market competition standards such as anti-internal volume and 60-day payment periods, reconstructing the industry order, and promoting the healthy and sustainable development of the automobile industry. The automobile industry will enter a new stage of development from "intra-involving" to "anti-involving".

Review of the passenger car market in the first half of the year

In the first half of 2025, driven by the "two new" policies, the growth rate of domestic sales exceeded the growth rate of exports, and domestic sales became the main engine of the growth of the auto market in the first half of the year, with an incremental contribution rate of up to 83%. In terms of different types of power in the domestic sales market, new energy sales increased by 39.7% year-on-year, contributing to the core increase. Although ICE showed negative growth, the decline performance exceeded expectations.

In terms of body type and model level, A0-class sedans, A-class SUVs and B-class SUVs are the major incremental contribution market segments in China's passenger cars in the first half of the year. Among them, A0 and A00 sedans contribute 45% of the increment. Mainstream A-class and B-class SUVs contributed 36% of the increment.

In terms of new energy power types, the year-on-year growth rate of plug-in hybrid (including extended-range) sales slowed down to 29%. Among the sales structure of new energy segment, BEV market share increased to 61.9%, and the proportion of plug-in hybrid and extended-range structures decreased by 2.6 percentage points and 1 percentage point respectively compared with 2024. This year, the BEV market segments have achieved growth, and A00 and A0 pure electric contributed 60% of the incremental growth driven by the "two new" policies. Other segments have achieved significant increases driven by new car product sales. On the other hand, the sales performance of the top automakers in the plug-in hybrid and extended-range market was lower than expected, which has a key impact on the overall plug-in hybrid and extended-range market trend.

In terms of competition among car companies, the current auto market has formed differentiated competition among three major camps driven by multiple elements. The leading independent car companies BYD, Geely, Chery, Wuling and Changan are leading joint ventures and new power companies with absolute scale advantages, gradually forming a more than one strong situation. Driven by the dual wheels of new energy and export, sales continue to rise, multi-technology of new energy has accelerated its development, the layout of the entire route has gradually improved, and intelligent technology has continued to catch up.

New power companies represented by Ideal, Wenjie, Xiaopeng, Xiaomi, etc. focus on smart electric power, seize users' minds through technological first launch and scenario innovation, and establish an intelligent first-mover advantage. Sales volume has grown rapidly in the past two years and profitability has been continuously improving.

For joint venture car companies, due to the slow electrification transformation, sales have been in a downward state in recent years, and their market share has been continuously squeezed, and most car companies have a market share of less than 4%. Currently, Volkswagen and Toyota are at the top, relying on fuel technology to stabilize the traditional base, coupled with intelligent empowerment and service rights upgrades, sales performance is good. Under the impact of the new luxury brands, traditional luxury BBA brands have both volume and price. Faced with the challenges emerging in the Chinese market, joint venture car companies are taking a series of actions such as increasing local R&D and introducing new models, building a technical cooperation ecosystem and feeding back to the world to enhance market competitiveness. Against the backdrop of the global wave of electrification and intelligence accelerating the reshaping of the industrial structure, only enterprises that can efficiently combine local R&D, local manufacturing, and local brand strategies can achieve sustainable market survival.

Future trend prospects

Under the influence of positive factors such as the old-for-new policy, the upgrading of new energy technology, and the intensive launch of new products, it is predicted that the size of China's passenger car market in 2025 will exceed 28.8 million vehicles, of which domestic sales will reach 23.4 million vehicles, a year-on-year increase of more than 4%, and exports are expected to be 5.25 million vehicles, a year-on-year increase of 6%. New energy remains the core driving force for the growth of the auto market. The scale is expected to be 15.4 million vehicles in 2025, and the year-on-year growth rate of new energy exceeds 25%. The new energy segmentation types are growing rapidly, among which BEV will become the main engine of growth with policy-driven and global segmentation growth. The sales volume is expected to be 9.3 million vehicles, with a year-on-year increase of about 30%.

In the long run, with the rapid development of domestic new energy passenger cars, the increase in demand for exchange and trade overseas, my country's passenger cars will continue to usher in development space. It is expected that the market size will exceed 30 million vehicles by 2030, and the market share of independent brands with strong competitiveness in this round is expected to exceed 80% in 2030.

In terms of competition among car companies, driven by multiple factors such as cost control, iteration of new energy and intelligent technology, precipitation of traditional technology, transformation of service models, and intensified market competition, car players may gradually evolve into future auto manufacturers, ecological brand service providers, market-segmented product leaders, leading joint ventures and other various other forms of camps.