China's automotive production and sales report for February 2025 has been released, marking a strong start after the Spring Festival!
On Monday, March 10, the Passenger Car Association announced the national passenger car market data for February. In February, national passenger car retail sales reached 1.386 million units, a year-on-year increase of 26.0%, but a month-on-month decrease of 22.8%; the cumulative retail sales for January-February reached 3.179 million units, a year-on-year increase of 1.2%. February's retail sales were at a historical high for the month, and the January-February period showed a return to positive growth, indicating strong market performance.
The Passenger Car Association stated that recent changes in the domestic and international macro environment have been better than expected, consumer sentiment has remained relatively stable, and the sustained marketing efforts of car companies during the Spring Festival, combined with last February's low sales base, have led to February's car market performing better than the sluggish trend after the 2024 Spring Festival, achieving a strong start in February 2025 after the Spring Festival.
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Among them, the retail sales of new energy passenger vehicles in February reached 686,000 units, a year-on-year increase of 79.7%, but a month-on-month decrease of 7.8%; the cumulative retail sales for January-February reached 1.430 million units, an increase of 35.5%. With the resumption of work after the holiday and the warming weather, consumer preferences have shifted significantly, and the penetration rate of new energy vehicles has rapidly increased week by week, becoming the main driving force for the recovery of the passenger car market after the holiday.
In terms of production, February saw the production of passenger vehicles reach 1.736 million units, a year-on-year increase of 38.7%, but a month-on-month decrease of 17.4%. The production of passenger vehicles for January-February totaled 3.829 million units, with a year-on-year increase of 16.5%. February's production was only 60,000 units lower than the historical peak of 1.79 million units in 2017. Considering the impact of the Spring Festival, the overall production performance was strong, making a significant contribution to local economic growth. In February, luxury brand production decreased by 17% year-on-year and 25% month-on-month; joint venture brand production increased by 10% year-on-year but decreased by 27% month-on-month; and domestic brand production increased by 66% year-on-year but decreased by 13% month-on-month.
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<h2>New energy retail sales increased by 79.7% year-on-year, with brands like Xiaomi Auto driving a 2.6 percentage point increase in new forces' market share</h2>
In February, the retail sales of new energy passenger vehicles reached 686,000 units, a year-on-year increase of 79.7%, but a month-on-month decrease of 7.8%; the cumulative retail sales for January-February reached 1.430 million units, an increase of 35.5%.
In February, the domestic retail penetration rate of new energy vehicles was 49.5%, an increase of 15 percentage points compared to the same period last year.
In February's domestic retail: the penetration rate of new energy vehicles among domestic brands was 70%; the penetration rate among luxury vehicles was 23%; while the penetration rate among mainstream joint venture brands was only 4%.
From the perspective of monthly domestic retail market share, in February, the retail market share of mainstream domestic brand new energy vehicles was 73%, an increase of 4.4 percentage points year-on-year; the market share of joint venture brand new energy vehicles was 2.1%, a decrease of 1.9 percentage points year-on-year;
New forces account for 19.9%, with brands like Xiaomi Auto driving a year-on-year increase of 2.6 percentage points in market share; Tesla's share is 3.9%, down 4 percentage points year-on-year.
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<h2>New energy exports increased by 27.8% year-on-year, down 15.2% month-on-month</h2>
This year, the overall automobile export continues the strong growth trend of last year. From January to February 2025, China's complete vehicle exports reached 970,000 units, a year-on-year increase of 17%. According to the Passenger Car Association: In February, passenger car exports (including complete vehicles and CKD) were 349,000 units, an 11% year-on-year increase, down 8% month-on-month, and from January to February, passenger car manufacturers exported 730,000 units, a 6% year-on-year increase.
In February, exports of self-owned brands reached 310,000 units, a year-on-year increase of 27%, down 1% month-on-month; joint ventures and luxury brand exports were 35,000 units, a year-on-year decrease of 47%.
In February, new energy passenger car exports were 118,000 units, a year-on-year increase of 27.8%, down 15.2% month-on-month. They accounted for 33.9% of passenger car exports, an increase of 4.4 percentage points compared to the same period last year; among them, pure electric vehicles accounted for 59% of new energy exports (84% in the same period last year), with A0+A00 class pure electric exports accounting for 50% of new energy exports (31% in the same period last year). The Passenger Car Association stated:
<blockquote>
&#34;With the scale advantages of Chinese new energy vehicles becoming apparent and the demand for market expansion, more and more new energy brand products made in China are going abroad, and their recognition overseas continues to rise. Although there have been some disruptions from external countries recently, the export of self-owned plug-in hybrids to developing countries is growing rapidly, with a bright outlook.&#34;
</blockquote>
<h2>Outlook: Rapid month-on-month growth in production and sales expected in March, with an estimated 5 million vehicle scrappage updates this year</h2>
The Passenger Car Association stated that March 2025 will have 21 working days, the same as March last year. Due to the rapid return to normal operations across various industries after the Spring Festival holiday, the month-on-month growth in production and sales in March is expected to be quite rapid.
The period after the Spring Festival is an important time for new product launches, with many manufacturers introducing new cars in large quantities. Under the promotion of national consumption policies, many provinces and cities have introduced corresponding consumption promotion policies, and the full recovery of offline activities such as auto shows will also accelerate the gathering of popularity. With recent prices of lithium carbonate and other materials at low levels, it is conducive for manufacturers to continuously optimize the cost structure and product iteration of new energy models, and the attention to the auto market will continue to heat up.
In 2025, the policy subsidies and incentives for the automotive industry will reach new highs, becoming a key factor in driving the overall prosperity of the automotive market and accelerating the transition of new energy consumption to the stage of mass popularity. The expansion of scrappage policies is expected to lead to 5 million scrappage updates this year, with scrappage subsidies amounting to about 90 billion yuan, while local replacement policies remain stable and strong, with an estimated 10 million vehicles to be replaced, totaling nearly 130 billion yuan.
At the same time, the production and sales of new energy vehicles this year are expected to be around 16 million units, bringing in over 2 trillion yuan in sales; 2025 is the last year for the vehicle purchase tax exemption policy, and under the current scale of the new car sales market, it is estimated that about 200 billion yuan in vehicle purchase tax exemption benefits can be released.
** This adds up to more than 400 billion, which, compared to the 5 trillion in automobile sales, represents an unprecedented level of subsidy, providing historically strong support for the development of the automotive market

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In February, the retail sales of new energy passenger vehicles reached 686,000 units, a year-on-year increase of 79.7% and a month-on-month decrease of 7.8%; the domestic retail penetration rate was 49.5%, an increase of 15 percentage points compared to the same period last year. From the monthly domestic retail share, the share of new forces was 19.9%, with brands like Xiaomi Automobile driving a year-on-year increase of 2.6 percentage points in the share of new forces

- In February 2025, China's passenger car market saw retail sales of 1.386 million units, a year-on-year increase of 26.0%, despite a month-on-month decline of 22.8%.  
- The strong performance was attributed to improved macroeconomic conditions, stable consumer sentiment, and effective marketing during the Spring Festival, leading to a significant recovery in the market.  
- Looking ahead, March is expected to witness rapid growth in production and sales, driven by new vehicle launches and supportive government policies, with an estimated 5 million vehicles to be scrapped this year.

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After the Spring Festival, a good start! China's passenger car sales in February increased by 26.0% year-on-year, returning to positive growth, with new energy vehicle sales up 79.7% year-on-year