- China’s auto market cooled in December 2025, with total passenger car retail sales falling 13% YoY.
- NEVs stood out as the key stabilizer, with retail sales rising 7% and penetration standing above 60%.
Latest data from the China Passenger Car Association (CPCA) show that the overall passenger car retail sales in China totaled 2.296 million units in December, down 13% year on year (YoY) but up 3% from November.
Cumulative retail sales for the year reached 23.779 million units, representing a 4% increase from a year earlier.
From a seasonal perspective, the year-end auto market failed to show a pronounced year-end sales surge. Demand release was slower than in previous years, with a clear cooling trend emerging toward the end of 2025.
Wholesale activity also came under pressure. Passenger car manufacturers wholesaled 2.759 million units nationwide in December, down 10% YoY and 8% MoM. Full-year wholesale volume reached 29.524 million units, up 9% YoY.
Despite the broader market weakness, new energy vehicles continued to serve as the primary support pillar.
The retail sales of NEVs reached 1.387 million units in December 2025, up 7% YoY and 5% MoM, with penetration standing at 60.4%.
On the wholesale side, NEV passenger car deliveries reached 1.554 million units in December, up 3% YoY but down 9% from November, with penetration easing to 56.3%.
On a full-year basis, cumulative NEV retail sales totaled 12.859 million units, up 18% YoY, while cumulative wholesale NEV volume reached 15.31 million units, up 25%, significantly outpacing overall market growth.
By contrast, conventional internal combustion engine vehicles faced intensifying contraction pressure. In December, production of gasoline-powered light vehicles fell to 905,000 units, down 29% YOY, while production of hybrid and plug-in hybrid models declined 26% to 525,000 units.
Weekly data show that both retail and wholesale activity remained weak during the first four weeks of December. Average daily retail sales in the first week were only 42,000 units, down 32% YOY.
Sales recovered sharply in the fifth week, reaching an average of 123,000 units per day and delivering 17% YoY growth.
Wholesale momentum was even more concentrated. Average daily wholesale volume surged to 201,000 units in the fifth week, posting a 45% YoY increase and becoming the main source of support for the month.
Retail performance at the start of December 2025 remained subdued. In December 2024, trade-in and replacement subsidy policies were further strengthened across multiple regions, significantly boosting market heat and raising the base of comparison, which weighed on this year’s growth rate.
At the same time, many consumers adopted a wait-and-see stance toward the direction of 2026 trade-in policies.
Even though December marked the final window for zero purchase tax incentives, the stimulus effect on demand proved limited.
As details of the next round of trade-in policies become clearer, the market broadly expects part of the deferred demand to be released in January 2026.
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