Recently, the latest data released by the China Passenger Car Association (CPCA) shows that in March this year, the national passenger car market retail sales totaled 1.94 million units, up 14.4% YoY and 40.2% MoM. Since the beginning of this year, cumulative retail sales reached 5.127 million units, up 6% YoY.
Cui Dongshu, Secretary General of the CPCA, pointed out that in recent years, the domestic car market retail sales have shown a trend of low in the first half and high in the second half. In March this year, retail sales were only slightly lower than the highest level of 1.98 million units in March 2018, remaining at a historical high for March. Driven by the national dual-new policy, the price war was relatively mild, and the cut-throat competition in the industry improved. The YoY retail growth rate in March this year was the highest in nearly 10 years, reversing the trend of low growth in March over the past decade.
Domestic brands captured 63% of the market share.
In March, domestic brands continued to perform well.
CPCA data shows that in that month, domestic brand retail sales reached 1.22 million units, up 31% YoY and 33% MoM. Such strong growth momentum highlights the vitality and potential of domestic brands. With this achievement, domestic brands accounted for 62.7% of the domestic retail market, slightly down from February but still up 7.7 percentage points YoY.
From January to March, the retail market share of domestic brands also reached 63%, up 7.9 percentage points YoY, further consolidating their dominant position in the market.
Mainstream joint venture brands did not continue the trend of both YoY and MoM declines. In that month, their retail sales were 480,000 units, up 45% MoM, but still with a slight YoY decline. The market shares of major factions continued to decline, with German brands accounting for 17%, down 3.6 percentage points YoY; Japanese brands accounting for 12.2%, down 1.5 percentage points YoY; and US brands accounting for 6.8%, down 1.4 percentage points YoY.
Focusing on the luxury car segment, retail sales in that month were 250,000 units, down 7% YoY but up 68% MoM. The retail market share was 12.9%, down 3 percentage points YoY.
From the comparison of market shares, it is clear that domestic brands remain the absolute main force in the passenger car market, once again demonstrating the success of traditional domestic enterprises in their NEV transformation. The CPCA pointed out that domestic brands have gained significant increments in the NEV and export markets, with leading traditional automakers performing excellently in their transformation and upgrading. Brands such as BYD, Geely, Chery, and Changan have seen significant increases in their market shares.
Data shows that in March, the NEV penetration rate among domestic brands in domestic retail sales was as high as 72%, while it was 35% for luxury cars and only 6% for mainstream joint venture brands.
From the monthly NEV domestic retail market share, in March, mainstream domestic brands accounted for 71.5%, up 1.3 percentage points YoY; joint venture brands accounted for 2.8%, down 2.3 percentage points YoY; new forces accounted for 17.1%, up 3 percentage points YoY; and Tesla accounted for 7.5%, down 1.2 percentage points YoY.
It can be said that the first-mover advantage of domestic brands in the NEV field is gradually transforming into comprehensive market competitiveness. Traditional domestic brands such as BYD, Geely, and Chery have successfully seized market opportunities by rapidly deploying NEV models. At the same time, new force brands are also accelerating their rise, further driving the growth of domestic brands' market share in the NEV field.
In contrast, joint venture brands are lagging significantly in the NEV field, with their market shares continuing to decline, reflecting their strategic delays and insufficient technological reserves in the NEV transformation.
Although the luxury car market has occupied a certain market share in the past due to brand premium and technological advantages, its NEV penetration rate is low, facing dual impacts from domestic high-end brands and NEV new forces, with increasing market competition pressure.
Following this trend, 2025 may become an important year for domestic brands to accelerate the restructuring of the competitive landscape. According to the latest forecast by Gasgoo Automotive Research Institute, the market share of domestic brands is expected to reach 72.5% in 2025, with BYD, Chery, and Geely expected to contribute 1.88 million units of sales increment to the car market in 2025.
NEV penetration rate rebounded to 51%.
According to CPCA data, in March, the retail sales of passenger NEVs reached 991,000 units, up 38% YoY and 45% MoM. From January to March, cumulative retail sales reached 2.42 million units, up 36.4% YoY.
Focusing on the single month, the NEV penetration rate in the overall domestic passenger car retail market in March was 51.1%, up 8.7 percentage points YoY.
As is well known in the industry, in July 2024, the domestic retail penetration rate of NEVs exceeded 50% for the first time, and then remained above 50% for five consecutive months. However, in the following three months, due to factors such as the Chinese New Year (the period before and after the Chinese New Year is the peak season for car purchases in county and rural markets, with high demand for new purchases and a higher proportion of internal combustion engine vehicles), the corresponding penetration rate was below 50%.
Now, after three months, the domestic retail penetration rate of NEVs has returned to above 50%, undoubtedly demonstrating the resilience of the NEV market.
Cui Dongshu stated that the domestic retail penetration rate of NEVs rebounded to 51.1%, showing strong growth against the backdrop of scrappage and renewal, trade-in policies, and NEV purchase tax exemptions.
It is reported that as of March 24, the total number of car trade-in applications nationwide exceeded 1.5 million. This data not only reflects consumers' strong demand for NEVs but also reflects the government's policy direction of promoting car consumption upgrading and energy conservation and emission reduction. As more consumers choose trade-ins, the NEV market is expected to see greater development space.
Gasgoo also noted that in March, the export volume of passenger NEVs increased both YoY and MoM. This growth trend indicates that the competitiveness of China's NEV industry in the international market is continuously improving.
Specifically, in that month, China's passenger NEV exports reached 143,000 units, up 6.4% YoY and 21.2% MoM, accounting for 36.6% of passenger car exports, up 4.9 percentage points YoY. Among them, pure electric vehicles accounted for 62% of NEV exports (83% in the same period last year). Although the proportion has declined, it remains the main force of NEV exports. As the core focus, A00+A0 class pure electric vehicles accounted for 33% of NEV exports (37% in the same period last year). Although the proportion has slightly declined, it still maintains a high level of exports.
Focusing on automakers, BYD still performed excellently in passenger NEV exports, with its export volume reaching 67,307 units in that month, showing strong market competitiveness. Following BYD, Chery's passenger NEV export volume was 16,376 units, also performing well. Chery has gradually enhanced its international market visibility and influence by continuously launching NEV models that meet international market demand. In addition, Geely and SAIC Motor also performed prominently in passenger NEV exports.
It is worth noting that Tesla China was mostly ranked in the top two previously, but its ranking has declined in the past two months. In March, its passenger NEV export volume was only 4,701 units, a significant gap from previous performance, which may be related to changes in overseas policies, weak demand, and intensified market competition.
The car market in April is expected to grow steadily.
Looking back at the performance of the passenger car market at the beginning of this year, January experienced a temporary cooling due to multiple factors. However, with the full recovery of social and economic activities after the Chinese New Year holiday, production and sales data rebounded strongly in February, and the market further returned to normal consumption rhythm in March. As Cui Dongshu said, the comprehensive retail performance in February-March was excellent.
Behind this, Gasgoo noted that in March, the state arranged 300 billion yuan of ultra-long-term special treasury bonds to support consumer trade-ins, with the main goal of promoting consumption, which undoubtedly provided strong support for the passenger car market.
Driven by the state's consumption promotion policies, many provinces and cities have introduced and gradually implemented corresponding consumption promotion policies. Combined with the full launch of offline activities such as auto shows and OEM subsidies, the car market started well in March.
Moreover, as the pre-holiday internal combustion engine vehicle consumption wave turned into the post-holiday NEV consumption wave, the NEV penetration rate continued to rise, making NEVs the main driving force for the recovery of the spring passenger car market.
Looking ahead to the car market trend in April, combined with CPCA analysis, under the support of multiple favorable factors, the passenger car market is expected to continue its steady growth trend.
On the one hand, in terms of the number of working days, April has 22 working days, the same as the same period last year, which is conducive to the steady growth of car market production and sales.
On the other hand, the price war in the spring of 2024 led to a severe market downturn in February-March. With the implementation of the 2024 scrappage and renewal policy on April 24, the car market gradually recovered after April last year, and this April still has a certain low base promotion effect.
In addition, driven by the state's consumption promotion policies and corresponding policies in many provinces and cities, spring auto show offline activities will fully activate the market atmosphere and accelerate the gathering of popularity.
"The timely holding of the Shanghai Auto Show and the model release activities during the promotion period of the Shanghai Auto Show, combined with the implementation of local consumption promotion policies, will undoubtedly become a catalyst and trigger point for promoting domestic car consumption," Cui Dongshu said.
In addition, this year's five-day May Day holiday is a good time for driving trips. In recent years, self-driving tours have continued to be popular, and the self-driving experience is better with high-level assisted driving. Recently, new products have enhanced cost performance by adding configurations without increasing prices, which will also drive the demand growth of new purchase and replacement groups.
In addition, the CPCA also pointed out that due to drastic changes in the external environment and the unexpected pressure of widespread tariff increases, consumer sentiment has also been affected to some extent. However, the state has long had a policy orientation to promote domestic demand, so the trend of our development being driven by both domestic and external demand is becoming increasingly obvious, and the effect of stabilizing domestic demand in the passenger car market will continue to be reflected.
Focusing on the export level, the institution believes that China's car exports to the US account for a negligible proportion, especially since domestic brands are not sold in the US at all, so China's domestic brand cars will not be affected by US tariff increases.
Of course, it also pointed out that this round of tariff adjustments may affect the production and construction layout of Chinese brands in some overseas bases in the short term, but Chinese cars in the future globalization strategy have development space. "With the deepening of cooperation in the Belt and Road and global south countries' markets, we need to develop passenger car categories that meet local demand, especially encouraging the local manufacturing and popularization of NEVs, while highlighting China's industrial advantages in internal combustion engine vehicles to achieve energy conservation and emission reduction in the global market."
