Record Growth in China’s Automotive Industry Driven by Innovation and Strong Market Demand

Economic Quarterly Report Reflects Confidence: Strong Production and Sales, Innovative “Smart” Manufacturing Leads Automotive Industry to a Bright Start

On April 11, 2025, the China Association of Automobile Manufacturers released data showing that in the first quarter of 2025, the cumulative production and sales of automobiles in China reached 7.561 million and 7.47 million, marking year-on-year increases of 14.5% and 11.2% respectively. Notably, the production and sales of new energy vehicles surged by 50.4% and 47.1%.

China currently stands as the world’s largest producer and exporter of automobiles. Despite the complexities of external environments, such as increased tariffs from the United States, the automobile production and sales in China continue to thrive, reflecting the resilience and dynamism of the nation’s economy.

Policy Support

The cumulative production and sales of passenger vehicles in the first quarter reached 6.513 million and 6.419 million, with growth rates of 16.1% and 12.9%, largely attributed to the ongoing impact of policy measures.

This year, the government has intensified and expanded the “trade-in” policy for consumer goods. Various regions have implemented matching incentive measures, along with the continuation of tax exemptions for new energy vehicle purchases, making “upgrading to a new vehicle” a popular choice among consumers.

On March 28, residents of Beichen District in Tianjin attended an event to explore vehicles. The event featured a range of displays for automobiles, home appliances, and digital products, attracting numerous citizens eager to make purchases.

Chen Yi, the general manager of Xinlong Automobile Sales Co., Ltd. in Luoning County, Henan Province, remarked, “Recently, the number of people buying cars, especially new energy vehicles, has significantly increased. Sales in January 2025 were about 20% higher than in December 2024, totaling over 70 units sold.” According to the Ministry of Commerce, as of March 28, applications for the automobile “trade-in” subsidy have exceeded 1.769 million.

“With our trade-in policy, manufacturers are providing discounts on certain models, with cumulative subsidies reaching nearly 35,000 yuan for some models. In the first quarter, we sold almost 700 new energy vehicles, including around 150 intelligent driving models,” said Ma Chao, a sales representative in Xinjiang.

Strong Market Demand Fuels Innovation

This year, many automobile manufacturers have launched new products, accelerating the iteration of their offerings. In mid-March alone, numerous brands released over ten new models that not only showcased advanced designs but also featured upgrades in powertrain configurations and intelligent driving technologies, catering to the diverse needs of consumers.

In the first quarter, the production and sales of new energy vehicles continued to see significant growth, achieving 3.182 million and 3.075 million units respectively. This explosive growth in the new energy vehicle market is supported by the automotive industry’s ongoing focus on breakthroughs in core technologies, such as longer battery life, faster charging, and advanced capabilities in lidar and AI chip processing.

The development of intelligent manufacturing is deeply integrated into the automotive industry. The “New Energy Vehicle Industry Development Plan (2021-2035)” issued by the State Council emphasizes the acceleration of core industrial software development and integration for intelligent manufacturing simulation, management, and control, as well as the demonstration of smart factories and digital workshop applications.

Located in Panyu, Guangzhou, the GAC Aion manufacturing plant is currently the only “lighthouse factory” in the global new energy vehicle sector. According to Sun Tao, the quality technology group leader at the first intelligent manufacturing center of GAC Aion, this factory integrates artificial intelligence, big data, and leading robotic technologies. “Vehicles undergo assembly through over 200 stations in the final assembly workshop before proceeding to the quality inspection line. Our current capacity is equivalent to an annual production standard of 200,000 vehicles, meaning we produce one vehicle every minute,” Sun stated.

Bright Future Ahead

In the first quarter, sales of Chinese brand passenger vehicles reached 4.369 million, a year-on-year increase of 28.8%, with a market share of 68.1%, further improving from the previous year. The key strategies for Chinese brands breaking through include intelligence, personalization, and ecological considerations.

With technological innovation and product quality, domestic independent brands are continuously moving up the value chain and gradually establishing a foothold in the global market, showcasing the deep accumulation of technological capabilities by Chinese enterprises.

Chen Zhuo, president of Avita Technology (Chongqing) Co., Ltd., noted that the upgrade in consumer expectations, the evolution of the electrification and intelligentization sectors, and the burgeoning demand from the new generation of consumers for domestic brands have reshaped the automotive industry landscape, providing opportunities for brands like Avita to develop high-end products.

As competition intensifies around intelligent driving technology, smart cabins, and onboard AI models, automobiles are evolving from mere transportation tools into intelligent terminals, accelerating the automotive industry’s transition into the new era of smart driving.

The recent government work report emphasized the importance of “vigorously developing intelligent connected new energy vehicles,” indicating a clear direction for enhancing China’s competitiveness in the global market. Chen Shihua, deputy secretary-general of the China Automobile Association, believes that China stands at the intersection of technological and institutional innovation amid the global intelligent automotive revolution. Continuous improvement of policies and regulations will strengthen safety foundations, paving the way for the Chinese automotive industry toward a broader future.