The Automotive Market Heats Up

Since the beginning of this year, China’s automotive market has continued to show signs of recovery. During the “May Day” holiday, a surge in automotive consumption highlighted its strong resilience and growth potential, becoming a vital force in stimulating consumption and stabilizing the economy.

Significant Increase in Foot Traffic

Currently, both central and local policies are taking effect, and dealerships have launched various initiatives to promote the circulation of used cars and new car sales. According to Cui Dongshu, Secretary-General of the Passenger Car Market Information Joint Conference of the China Automobile Dealers Association, the car market began to strengthen in March. The “May Day” holiday saw a peak in automotive consumer traffic.

On May 1st, the Huawei flagship store in Wangfujing, Beijing, was bustling with consumers looking at cars. Mr. Wang, who lives in Dongcheng District of Beijing, visited with his family and remarked, “This car is really nice” after examining a vehicle closely.

Similarly, the Huan Yao Sheng Shi BYD Dynasty Store in Fengtai, Beijing, was also crowded. Liu Xiuzhan, Executive General Manager of Huan Yao Group, informed reporters that the current discounts on car purchases are substantial. For instance, the BYD Han EV with intelligent driving assistance offers a maximum trade-in subsidy of 15,000 yuan, a government subsidy of up to 20,000 yuan, and an additional promotional discount of 10,000 yuan during the May Day event.

The manager of the Fangchengbao Automotive Beijing Xinmin Hengxin 4S Store noted that even before the May Day holiday, there was a noticeable increase in foot traffic at the store. With more consumers looking to purchase vehicles during the holiday, combined with the recent popularity of new car models and promotional activities, foot traffic has risen by approximately 30% year-on-year, particularly among families. To accommodate the surge, the store has optimized its reception process and extended its hours.

Multiple Positive Factors Driving Consumption

On May 1st, several automotive companies released their sales and delivery data for April, further confirming the recovery trend in China’s automotive market, particularly within the new energy vehicle sector.

Policy incentives have played a crucial role in boosting automotive consumption. According to the Ministry of Commerce, as of April 24th, a total of 2.705 million vehicles have been traded in nationwide, effectively stimulating automotive consumption and overall retail growth. The head of Dongchedi announced the launch of a “National Automotive Trade-In Intelligent Service Platform,” which facilitates centralized inquiries and receipt of government automotive consumption subsidies, covering all 31 provinces. This platform integrates government, automotive company, and platform subsidies, making it easier for consumers to access benefits and maximize their car purchase discounts.

A series of consumer-boosting policies have been rolled out from central to local levels, focusing on trade-in programs and green, intelligent upgrades to invigorate the automotive market. During the “May 5 Shopping Festival,” a new round of automotive consumption promotion activities was launched in the Pudong New District of Shanghai. Starting from May 1st, consumers purchasing new gasoline vehicles meeting the National VI B emission standards or new energy vehicles in Pudong can receive a subsidy of 3,000 yuan per vehicle upon obtaining a unified sales invoice from an automotive sales entity in the district, with a total of 30,000 available slots on a first-come, first-served basis.

According to Wu Songquan, a senior chief expert and chief engineer at the China Automotive Technology and Research Center, the trade-in policy has lowered the cost of vehicle replacement for consumers, stimulating potential demand and injecting momentum into the automotive market. Innovations in new energy vehicle technology, along with advancements in infrastructure, have continuously improved product performance and quality, while prices have been declining, effectively alleviating “range anxiety” and attracting more consumer attention. Moreover, 2025 marks the last year of tax exemption for new energy vehicles (with a 50% reduction from 2026 to 2027), which is expected to drive continued growth in new energy vehicle sales.

Consumer Upgrades Foster New Trends

As consumer demands for comfort, entertainment, and multifunctionality continue to evolve, catering to these changing needs has become a crucial strategy for automotive companies in their pursuit of differentiation.

For example, the Wenjie M8 features an integrated panoramic screen, a dedicated independent cinema for the front passenger, and support for separate Bluetooth channels, allowing for non-disruptive experiences. The BYD Han EV with intelligent driving assistance is equipped with a 5G smart cockpit, multi-color ambient lighting, and dual-zone automatic air conditioning, catering to diverse consumer needs.

Wu Songquan noted that automobiles are transforming from mere transportation tools into large mobile smart terminals and digital spaces, with integrated driving assistance and intelligent cockpit functions that meet consumer demands for safety, convenience, comfort, and personalization, becoming key selling points for automotive companies and significant considerations for consumers when purchasing vehicles.

Thanks to early investments in new energy and intelligent connected technologies, the recognition of domestic automobile brands has increased significantly. Research indicates that 74.58% of respondents prefer domestic brands when purchasing a vehicle. The core motivation for choosing domestic cars has shifted from “low price” to “high value,” with 33.15% of respondents citing “rich features and strong technological appeal” as their primary purchasing factor.

Cui Dongshu believes that in terms of the application of new technologies in intelligent cockpits, domestic automotive companies have performed excellently, particularly in the field of intelligent driving assistance, which has significantly propelled the development of China’s automotive industry.