On August 27, the China Passenger Car Association (CPCA) released its automotive market review for August 18-24, 2025.

From August 1-24, China's passenger vehicle market recorded retail sales of 1.285 million units, representing a 3% increase compared to the same period last year and a 3% growth versus the previous month. Cumulative retail sales for the year reached 14.031 million units, up 10% year-on-year.

For the same period, nationwide passenger vehicle wholesale volumes reached 1.341 million units, marking a 12% increase from last year's corresponding period and a 5% rise from the previous month. Year-to-date wholesale volumes totaled 16.866 million units, reflecting a 13% year-on-year growth.

In the new energy vehicle (NEV) segment, retail sales from August 1-24 reached 727,000 units, up 6% year-on-year and 7% month-on-month. The NEV retail penetration rate stood at 56.6%. Cumulative NEV retail sales for the year totaled 7.182 million units, representing a 27% increase year-on-year.

NEV wholesale volumes during the same period reached 711,000 units, up 11% year-on-year and 3% month-on-month, with a wholesale penetration rate of 53%. Year-to-date NEV wholesale volumes reached 8.345 million units, up 33% compared to last year.

Weekly performance showed varying trends: The first week of August recorded average daily retail sales of 45,000 units, down 4% year-on-year but up 6% month-on-month. The second week saw 59,000 units daily, up 8% year-on-year and 10% month-on-month. The third week recorded 60,000 units daily, up 6% year-on-year but down 5% month-on-month.

China's robust economic growth of 5.3% in the first half of the year significantly reduced pressure for stable growth across regions, leading to more measured promotional policies in local automotive markets. The third batch of subsidy funds was distributed to various regions in late July, with some areas gradually restarting trade-in programs using more diversified subsidy methods, potentially improving August's growth rate.

However, the strong performance of "trade-in" policy subsidies in July 2024 created a relatively high base for comparison, putting pressure on August 2025 growth rates. High temperatures and frequent rainfall in early August led many consumers to delay purchases until mid-month ahead of the autumn school season, with the market expected to gradually warm up in late August.

For wholesale volumes, the first week of August recorded average daily sales of 40,000 units, up 16% year-on-year but down 3% month-on-month. The second week saw 63,000 units daily, up 22% year-on-year and 19% month-on-month. The third week recorded 71,000 units daily, up 2% year-on-year and 3% month-on-month.

Despite ongoing international uncertainties and challenges including insufficient demand and price pressures, the automotive industry maintained strong export performance. Central government departments and local regions are accelerating implementation of more proactive macroeconomic policies to effectively address external challenges, resulting in rapid growth in automotive production, sales, and exports.

Recent national anti-involution initiatives have rapidly progressed, significantly improving industry order. Due to more frequent high-temperature breaks last year and strong July performance in 2024, early August wholesale volumes weren't particularly high last year. This year, manufacturers are more actively seizing opportunities to boost sales, resulting in strong early-month wholesale performance.

Import vehicle data revealed continued challenges. From January to July 2025, imported vehicles totaled 270,000 units, down 32% year-on-year – a rare significant decline for the seven-month period. July imports reached 50,000 units, down 29% year-on-year but up 16% month-on-month.

After peaking at 1.43 million units in 2014, import volumes have generally declined, with slight stabilization in 2016-2017 before continuous decline from 2018. Import volumes fell to 800,000 units in 2023 (down 10%) and further to 700,000 units in 2024 (down 12%).

Export performance remained strong, with China achieving 4.18 million vehicle exports from January to July 2025, up 20% year-on-year. July exports reached 700,000 units, up 27% year-on-year and 12% month-on-month. The growth was primarily driven by improved Chinese product competitiveness and modest growth in Global South markets.

Top export destinations in July included Russia (48,712 units), UAE (44,185 units), Mexico (43,074 units), Belgium (32,621 units), and the UK (31,891 units).

NEV exports showed particularly strong performance, with July NEV exports reaching 291,000 units (up 74%) and January-July totals of 1.71 million units (up 46%). This growth was driven by plug-in hybrids and hybrid vehicles replacing pure electric vehicles as new export growth drivers, with plug-in hybrid pickups showing particularly strong performance.

In the Russian market, which remains significant for fuel vehicle exports, Chinese automakers including GEELY AUTO, Chongqing Changan Automobile Company Limited, Chery, and BYD COMPANY continued to perform well despite overall market challenges.

Industry inventory levels showed improvement, with nationwide passenger vehicle inventory at 3.29 million units at the end of July 2025, down 30,000 units from the previous month and 40,000 units from July 2024. Current inventory levels support approximately 47 days of future sales, compared to 53 days in July 2023 and 51 days in July 2024, indicating significantly reduced inventory pressure.

Pure NEV manufacturers held 780,000 units in inventory in July, down from 880,000 units in April and 800,000 units in June, showing continued inventory optimization.