Retail sales of passenger vehicles in China, including sedans, MPVs, and SUVs, declined by over 8% year-on-year to 2.23 million units in November 2025 from 2.45 million units in the same month last year, according to data compiled by the China Passenger Car Association (CPCA).

This was the second consecutive month of decline for the market, after rebounding strongly over the last year, driven by government sales incentives and aggressive price competition among local manufacturers. The market is now looking somewhat saturated, as it comes up against strong year-earlier volumes – after sales rose by 18% in November last year. China’s GDP growth slowed to 4.8% year-on-year in the third quarter of 2025, reflecting weakening consumer sentiment and growing business uncertainty due to the country’s strained trade relations with the US.

Sales of internal combustion engine (ICE) vehicles declined by 22% to 910,000, while new energy vehicle (NEV) sales rose by 4% to 1.32 million units – or over 59% of total sales.

In the first eleven months of 2025, overall passenger vehicle retail sales in China rose by 6.6% to 21.622 million units from 20.285 million units in the same period last year. Sales of new energy vehicles increased by just under 20% to 11.47 million units year-to-date, equivalent to 53% of passenger vehicle retail sales in the country, while sales of ICE vehicles amounted to 10.15 million units.

The Chinese government has indicated it will reduce its NEV stimulus programme at the end of the year, with the CPCA confirming it expects a strong surge in NEV sales in December.