In March 2025, China’s LV market surged, propelled by national policies aimed at stimulating consumer spending, with numerous provinces and cities developing and progressively implementing measures to bolster consumption in response. Additionally, the comprehensive initiation of in-person events, such as auto shows, along with incentives provided by OEMs, contributed to the month’s strong performance.
Focusing on LV sales (excluding exports), volumes totaled 2.4 million units in March, representing a YoY increase of 10.5% and a MoM increase of 43.0%. This expansion can be partly attributed to disruptions related to the Spring Festival holiday. By model type, PV sales dominated with 2.1 million units sold, which indicated an increase of 11.9% YoY and 43.1% MoM. At the same time, LCV sales exhibited a positive trajectory, with increases of 2.0% YoY and 42.5% MoM. On a cumulative basis, LV sales in Q1 2025 as a whole rose by 12.2% YoY. The national subsidy policy, which encourages the exchange of older products for new ones, continued to act as a catalyst for consumer spending. According to the data, the March selling rate reached 26.7 million units/year, marking a 24% uptick from February.
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In assessing the overall sales performance of the market in Q1 2025, it is evident that the intensity of the current price competition has diminished, and the industry’s internal dynamics have shown signs of improvement. Following a period of adjustment during the Spring Festival holiday, the market experienced a surge in growth in March. From a macroeconomic standpoint, the domestic economy’s stable expansion has provided robust support for the automotive sector, with consumer purchasing power demonstrating a sustained increase. Automakers have redoubled their efforts in product research and development, production, manufacturing, and marketing. By refining their product portfolios, introducing a greater variety of models that align with market demands, and enhancing product quality and service standards, they have succeeded in attracting a broader consumer base. Moreover, the ongoing enhancement of the automotive finance market has offered consumers an array of financial solutions for vehicle purchases, effectively lowering the barriers to ownership and, to some extent, stimulating automotive consumption.
With the phased implementation of vehicle scrappage and replacement policies set for 2025, and automakers actively working to stabilize price expectations, the overall pricing competition in the auto market has been less aggressive than in previous years. Additionally, recent shifts in both domestic and international macroeconomic conditions have surpassed expectations, contributing to a relatively stable consumer sentiment. The Shanghai Auto Show is also anticipated to invigorate consumer demand.
In March 2025, the Chinese automotive market surpassed our forecasts, primarily due to an increase in exports. Total LV production reached 2.9 million units, marking a significant YoY increase of 12.1%. Within the various model types, the PV segment was the main driver of growth, with production totaling 2.5 million units and expanding by 13.2% YoY. Meanwhile, the CV industry experienced a notable improvement, with production rising by 4.5% YoY to 330k units. Chinese OEMs produced a total of 2.0 million units, achieving a YoY growth of 20.6%. Conversely, JV OEMs exhibited a negative trend, with a decline of 2.5% YoY. Cumulatively, the overall LV market grew by 15% YoY in the first quarter of the year.
In terms of exports, China’s LV shipments amounted to 471k units in March, representing a 1.3% YoY decrease. PV exports fell by 3.5% YoY to 411k units, while on the other hand, LCV exports expanded by 17.5% YoY to 60k units. Although shipments declined during the month, the picture was more positive for the first quarter as a whole, with exports increasing by 5.8% YoY to 1.27 million units in January-March. As such, the overall upward growth trend remained.
US Tariffs are shifting - will you react or anticipate?
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By GlobalDataRegarding our sales outlook, the recent tariff policies introduced by the Trump administration against China have introduced a significant degree of uncertainty into the broader market. However, it appears that the resulting impact is more indirectly related to consumer apprehension about the general economic climate rather than a direct effect on exports. Consequently, we have revised our sales forecast for China’s domestic market downward for the 2025-28 period.
In addition, the proportion of China’s automobile exports to the US is relatively minor. Notably, China’s independent automotive brands do not have a presence in the US market, rendering them unaffected by the tariffs. On the contrary, these independent Chinese brands may have the opportunity to expand their market shares in various overseas regions. The export trend for the first quarter of 2025 surpassed expectations, suggesting that China’s export strength is likely to continue to grow in the future.
Taking these factors into account, we have also adjusted the production forecast for the duration of Trump’s term, reducing the output from 2025-28 by 95k units. The YoY growth rate for 2025 is projected to be under 4%, while the growth rate for 2026 has been adjusted to reflect an anticipated YoY decrease of approximately 3%.
This article was first published on GlobalData’s dedicated research platform, the Automotive Intelligence Center.
