On August 18, nine government departments, including the Ministry of Commerce, jointly released guidelines aimed at invigorating consumption in county-level markets. The document places strong emphasis on supporting the sale of new energy vehicles, green smart products, and eco-friendly building materials in rural areas, while also calling for expanded charging infrastructure coverage in these regions.

In tandem with this national push, numerous localities have been introducing their own initiatives to stimulate automobile purchases. Beyond extending subsidies for new cars, many governments are now turning to used car purchase subsidies as a fresh policy lever, a shift that has captured significant market attention.

Untapped potential in county markets

The guidelines also encourage businesses to introduce premium products into county-level markets and to launch new models in these areas under the same conditions as urban centers, ensuring that rural and urban consumers enjoy equal access to identical goods. Companies are being urged to develop products tailored to the consumption habits of county residents, with support for flexible supply chains built around private labels and demand-driven production.

Historically, automakers have concentrated their sales networks in cities, where high population density and stronger purchasing power translate into more efficient marketing. However, as urban auto markets approach saturation, the vast county-level segment has emerged as the new frontier for growth.

Zhang Xiang, a visiting professor at the Huanghe University of Science and Technology, noted that the new energy vehicle rural campaign is a critical step in advancing the industry, designed to simultaneously support rural auto purchases and expand the overall market. He pointed out that the past scarcity of 4S dealerships and auto experience stores in county areas has hindered both vehicle purchases and after-sales service, which in turn has constrained consumption.

Liu Youhua, research director at Shenzhen PaiPaiWang Fund Sales Co., Ltd., observed that while county-level populations are enormous, their passenger vehicle sales and new energy penetration rates remain significantly below the national average. He believes that as policies take effect, county markets could become a core growth driver for domestic auto consumption.

Data from the China Association of Automobile Manufacturers shows that sales of new energy vehicles under the rural campaign soared from 397,000 units in 2020 to 9.431 million units in 2025, with cumulative sales exceeding 20 million units over the six-year period. In 2026, five government departments issued another notice to continue the campaign, adding 155 models to the recommendation list, ranging from micro commuter cars to family SUVs and pickup trucks, covering diverse needs from daily commuting to agricultural transport.

He Li, general manager of Beijing Zhiyu Zhi Shan Investment Management Co., Ltd., highlighted that vehicles sold under the rural campaign accounted for nearly 60% of total national new energy vehicle sales in 2025. Yet, penetration in county and rural areas remains below 20%, well under the national figure, leaving substantial room for improvement.

County markets still grapple with infrastructure gaps, a lack of tailored products, and underdeveloped service networks. Policy efforts are now focused on addressing these shortcomings, including upgrading charging and swapping facilities, expanding rural charging coverage, and promoting innovative models like integrated solar-storage-charging systems. Automakers are also being encouraged to develop models suited to county conditions and to roll out mobile maintenance and cooperative repair networks.

Industry insiders argue that beyond subsidies, closing these infrastructure and service gaps is essential to fully unlock the consumption potential of county-level markets.

Used car sector holds considerable promise

Recently, cities such as Changchun and Xi'an have introduced used car purchase subsidies, aiming to lower transaction costs and accelerate the trade-in cycle. As the national vehicle fleet continues to expand, the underlying consumption structure is undergoing a fundamental shift.

He Li explained that in July, new energy vehicles accounted for over 60% of monthly new car sales for the first time, signaling a transition in the domestic auto market from a phase driven purely by new energy penetration gains to one powered by multiple engines, including stock replacement, county-level expansion, and used car circulation. The market has already shifted from being led by first-time buyers to being dominated by upgrades and replacements. Used car subsidies, he noted, help form a closed loop of new car sales, fleet accumulation, used car trading, and replacement purchases, which in turn expands new car trade-in demand.

In the first half of this year, domestic used car transactions reached 9.7132 million units, a modest year-on-year increase of 1.5%. A notable structural divergence is emerging within the market, with new energy used car volumes surging more than 25% year-on-year, while older, large-displacement gasoline vehicles see continued contraction.

Liu Youhua believes the used car sector has significant growth prospects. Rising consumer expectations are forcing operators to refine their business practices to meet diverse demands. As new energy vehicles become a key growth segment in used car trading, the companies that can first offer consumers a worry-free ownership experience will likely seize the competitive advantage.