Retail sales of passenger vehicles in China declined by 9% year-on-year to 1.853 million units in January 2025 from 2.035 million in the same month of last year, according to preliminary data released by the China Passenger Car Association (CPCA).
The decline mainly reflected fewer working days in January due to the Lunar New Year holidays, which fell in February last year. It followed four consecutive months of growth at the end of last year, driven by generous government incentives, new models and aggressive promotional campaigns by manufacturers and dealers.
At the end of July the government doubled its one-off subsidy to CNY20,000 (US$2,800) for buyers trading in their old internal combustion engine (ICE) vehicles for qualifying new vehicles, and these subsidies have been extended until the end of 2025.
Economic growth in the country accelerated to 5.4% year-on-year in the fourth quarter of 2024, from a sluggish 4.6% growth in the third quarter, driven by stronger domestic consumption and exports - as manufacturers rushed to complete shipments to the US ahead of the expected hike in import tariffs by the US government under newly-elected President Donald Trump.
New energy vehicle (NEV) sales rose by 17% to 786,000 units in January, or 42% of total passenger vehicle retail sales in the country.
