Passenger Car Association: It is expected that retail sales of passenger cars will reach 24.35 million units in 2025, a year-on-year increase of 6%

According to the Zhitong Finance APP, the Passenger Car Association's forecasting team slightly adjusted the industry annual forecast for 2025 in mid-July based on the better-than-expected performance of the domestic and export markets and the rolling forecast for the next four months. The overall forecasts are as follows: In 2025, retail sales of passenger cars are expected to reach 24.35 million units, an increase of 6%, with the total forecast up by 300,000 units compared to the June forecast. In 2025, passenger car exports are expected to reach 5.46 million units, an increase of 14%, with the total forecast up by 160,000 units compared to the beginning of the year. In 2025, wholesale of new energy passenger cars is expected to reach 15.48 million units, an increase of 27%, with the total forecast slightly down compared to the June forecast, and the penetration rate of new energy wholesale reaching 56%. In 2025, total automobile wholesale is expected to reach 34.04 million units, an increase of 8%, with the total forecast up by 5 percentage points compared to the beginning of the year.

According to data released by the National Bureau of Statistics, China's GDP growth in the first half of 2025 reached 5.3%, marking a good start for our economic growth in the first half of the year, maintaining a steady development trend and injecting stable expectations into the automotive market.

In the first half of this year, supported by multiple favorable policies from the national and local governments to encourage automobile consumption and boost the economy, the automotive market has shown a distinct trajectory of "recovery growth, structural adjustment, and profit pressure." The cumulative retail sales of passenger cars from January to June achieved growth rates of 10.8% and 33.3% for new energy passenger cars, respectively.

In 2024, the output value of China's automotive industry has surpassed that of other domestic industries, becoming the primary pillar industry of the national economy. Therefore, stabilizing the development of the automotive industry is the first stabilizer for economic growth.

Looking ahead to the second half of the year, challenges and opportunities coexist. The international environment in 2025 remains complex and changeable, with the automotive market facing multiple pressures from domestic competition and uncertainties related to foreign tariffs. According to the spirit of the central meeting, this year aims to rectify internal competition, strengthen the guiding role of quality standards, and continuously optimize the market competition order. Considering the high base of last year's sales, the Passenger Car Association's forecasting team will continue to conduct rolling forecasts for the automotive market in the second half of the year.

This forecast is based on the following considerations from the Passenger Car Association's forecasting team:

The national passenger car market's "forecast index" and "satisfaction index" both exceeded 80% in June

The forecasting team's optimism for June's forecast reached 83% in mid-June, a high level. By mid-July, the satisfaction index for June's forecast reached 85%, indicating that the actual performance was better than predicted, reflecting the market's strong heat. However, the optimism for July was only 43%, reflecting a cautious attitude.

Overall retail in the first half of 2025 is better than expected

Domestic retail of passenger cars in May 2024 was weak, but there was a continuous upward trend from May to December. In January 2025, due to factors such as the earlier Spring Festival, the automotive market was weak, but the seasonal pattern of the market remained relatively stable thereafter. From February to June, the national passenger car market retail maintained a strong trend of around 15%. See the table below.

In June 2025, the national retail market for passenger cars reached 2.08 million units, a year-on-year increase of 18% and a month-on-month increase of 7.5%. The cumulative retail for this year is 10.91 million units, a year-on-year increase of 11%. In previous years, the domestic car market retail showed a "low at the beginning and high at the end" trend, and this year has achieved a good start.

The more proactive macro policies in the first half of the year have shown results, with the economy continuing to develop steadily and positively, demonstrating strong resilience and vitality. Although there are many external instability and uncertainty factors, the domestic demand stimulus effect has exceeded expectations. With the decline in housing prices and sales, the enthusiasm of the public for housing investment has decreased, and more consumer spending has shifted to automobiles and daily consumer goods, significantly promoting the car market.

2025 Narrow Passenger Car Production Slows Down

As the national anti-involution policy deepens, the enthusiasm for excessive production among enterprises will decline. In June, passenger car production reached 2.41 million units, a year-on-year increase of 13%, slightly lower than the production in March. Manufacturers are stabilizing production and reducing inventory, reflecting an attitude to improve the involution environment.

The growth rate of passenger car production in June has already slowed compared to the production from January to May, with a relatively moderate month-on-month increase. From January to June, passenger car production totaled 13.24 million units, with a cumulative year-on-year growth of 13%. Overall production is basically consistent with wholesale, alleviating inventory pressure.

2025 Export Factor Impact Forecast Adjustment

In 2020, the annual export market sales reached 1.08 million units, a year-on-year decrease of 13%. In 2021, export market sales were 2.19 million units, a year-on-year increase of 102%. In 2022, export market sales reached 3.4 million units, a year-on-year increase of 55%, mainly due to insufficient supply from overseas international brands and a significant enhancement in the export competitiveness of Chinese car companies. In 2023, China achieved automobile exports of 5.22 million units, with an export growth rate of 54%, showing sustained strong growth. Compared to the gradual recovery trajectory of domestic automobile sales, the performance of the export market can be described as exceptionally strong. Over the past five years, the growth of Chinese automobile exports has been significant, influenced by the international pandemic and the Russia-Ukraine crisis.

From January to June 2025, China achieved automobile exports of 3.48 million units, with a year-on-year growth rate of 18%. In June, China exported 620,000 automobiles, a year-on-year increase of 28% and a month-on-month decrease of 10%, with an overall strong year-on-year trend; the main driving force this year remains the improvement in the competitiveness of Chinese products and a slight growth in markets in global southern countries