Retail sales of passenger vehicles in China rose by 12% year-on-year to 2.635 million units in December 2024, according to preliminary data released by the China Passenger Car Association (CPCA). This was the fourth consecutive month of growth for this market, with generous government incentives, new models and aggressive promotional campaigns – including heavy discounting – helping to drive up demand.
China’s domestic economy remains sluggish, with fourth-quarter GDP growth expected to come in at around 4.7%, despite significant efforts by the government to stimulate consumer spending last year. GDP growth over the full year is expected to be in the region of 4.8%, held back by weak consumer sentiment and the prolonged property crisis in the country.
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New energy vehicle (NEV) sales rose by 37.5% to 1.302 million units in December, with battery electric vehicle sales rising 27% to 762,000 units, while plug-in hybrid vehicle sales rose by 73% to 419,000 units, after the government doubled its one-off subsidy in July to CNY20,000 (US$2,800) for buyers trading in their old internal combustion engine (ICE) vehicles for qualifying new models.
Total passenger vehicle retail sales in the country rose by 5.5% to 22.894 million units last year, reflecting mainly strong demand in the second half of the year. NEV sales rose by almost 41% to 10.975 million units, accounting for 48% of the total.
With the Chinese economy forecast to remain weak in 2025, the government has extended its car-buying subsidies until the end of 2025 to help support the domestic auto industry.
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By GlobalData
