China Car Market Size, Share and Growth Analysis Report - Forecast Trends and Outlook (2025-2034)

China Car Market Growth

Increasing sales of passenger vehicles, driven by rapid urbanisation, rising disposable incomes, and an enhanced standard of living, is a key trend in the China car market. According to the Chinese Ministry of Industry and Information Technology, over 26 million vehicles were sold in the country in 2021, out of which 21.48 million were passenger vehicles. This number is expected to surge owing to favourable subsidies for increasing the adoption of electric vehicles (EVs), lower vehicle taxes, and incentives for scrapping old cars. Further, the International Trade Administration projected the manufacturing of vehicles in the country to increase to 35 million by 2025, estimating further growth in the supply of cars across China during the coming years. This is expected to fuel the China car market revenue to new heights.

Another significant factor in the growth of the China car market is the rising exports of motor vehicles, which in 2023, exceeded USD 344 million. The demand for Chinese automobiles is increasing across the globe owing to multiple factors, such as competitive pricing, enhanced quality, integration of advanced technology, and the growing popularity of Chinese electric vehicle (EV) brands. As Chinese automakers gain further prominence and a stronger foothold in major international markets such as the US, the UK, and other Western nations, car exports are expected to rise sharply, creating new opportunities for major industry leaders.

Key Trends and Developments

China Car Market Trends

The expansion of car manufacturing facilities is becoming a new trend in the China car market as industry leaders focus on enhancing supply chain efficiencies and driving innovation with the upgradation of existing manufacturing capacities. These efforts are playing a crucial role in meeting the growing demand for diverse types of cars in the country, while also boosting car exports to global markets. Chinese tech giant, Xiaomi announced in October 2024, that it would complete the upgradation of its electric vehicle factory in mid-2025 in Beijing’s Yizhuang New Town, an economic development area, which is expected to boost the sales of its high-priced premium cars.

China Car Industry Segmentation

China Car Market Share

Rising disposable income is increasing the SUV car market share in China

SUVs are expected to grow at a CAGR of 4.7% during the forecast period. According to the China car market analysis, rising disposable income is a key factor driving the demand for sports utility vehicles (SUVs), often considered amongst the most expensive cars worldwide. These vehicles are seen as a luxury symbol, featuring outstanding design, performance, and comfort. Moreover, with domestic and international automakers introducing a wider range of luxury SUV models tailored to Chinese preferences, their demand is increasing among affluent buyers. According to China’s National Bureau of Statistics (NBS), the country’s per capita disposable income reached USD 5,511 in 2023, increasing 6.3% year-on-year in nominal terms. Further increases in income are expected to lead to a significant rise in SUV sales during the coming years.

Furthermore, the preference for hybrid sedans is influencing the China car market dynamics and trends, driven by environmental concerns and stringent government regulations on pollution control. To support the adoption of these vehicles, dealerships are offering generous discounts, enhancing their affordability for diverse income groups, despite offering luxury features such as premium interiors, advanced infotainment, and top safety features. Chery, a leading car manufacturer in China, revealed the launch date of its new Fulwin A9 plug-in hybrid sedan in early 2025 with a starting price of USD 35,400. The vehicle is expected to be equipped with an L3+ assisted driving system and a body length of nearly five meters.

Increasing production of natural gas is fuelling the growth of the CNG-based ICE car in the China car market

According to the China car market report, the CNG-based internal combustion engine (ICE) car market is leading the market. The US Energy Information Administration (EIA) stated that in 2023, domestic natural gas production in China averaged around 21.7 billion cubic feet per day, an increase of 6% since 2022. Besides, the 14^th Five-Year Plan (2021–25) has targeted the production to increase to 22.3 Bcf/d by 2025, which is expected to further fuel the supply and drive the growth in the CNG-based ICE car market. CNG-powered cars are highly preferred by car users owing to their lower fuel costs and reduced environmental impact compared to traditional gasoline or diesel vehicles. These vehicles produce fewer carbon emissions, which makes them an attractive option for environmentally conscious consumers, especially in urban areas with strict air quality regulations.

Hybrid and electric vehicles are expected to grow at a CAGR of 7.3% during the forecast period. The growing sales of electric vehicles (EVs) are reshaping the car market in China, as the country moves toward greener transportation solutions. Government policies, such as subsidies and incentives for EV buyers, alongside the rapid development of charging infrastructure, have further boosted EV car adoption in the country. According to the International Energy Administration (IEA), China accounted for 60% of global EV sales in 2023. Besides, the number of new EV registrations reached 8.1 million during the same period, marking a 35% year-on-year increase. This trend has fostered growth in the China EV car market segment, boosting competition in the China car market.

China Car Market Regional Analysis

Eastern China is leading the China car market share owing to growing demand from the expanding urban population

In east China, Beijing car market is experiencing steady growth, driven by the expanding urban population. According to the National Bureau of Statistics, the city’s urban population grew from 41,540 in 2022 to 43,760 in 2023. With more people moving to the capital, the demand for personal vehicles is rapidly increasing, particularly in suburban and peripheral areas where public transportation is less accessible. Additionally, government policies aimed at controlling traffic congestion have spurred a shift towards smaller, more efficient vehicles, boosting sales in these categories.

Similarly, Shanghai is also playing a significant role in the growth of the China car market, largely influenced by the rising demand for luxury vehicles. The city, known for its affluent population and status as a financial hub, has seen a surge in interest in premium brands like BMW, Mercedes-Benz, and Audi. In 2024, Audi launched its first new brand in the city alongside its first Audi E concept car. The introduction of this new brand and concept vehicle was designed to appeal to the city's affluent, environmentally conscious consumers, offering cutting-edge technology and sustainable luxury.

Competitive Landscape

The China car market key players are adapting to the latest trends, such as the growing adoption of e-vehicles, rising demand for premium luxury cars at competitive prices, and the integration of advanced technologies such as AI, IoT and robotics in self-driving cars, to expand their consumer reach.

BYD Co.

BYD Co., Ltd. was established in February 1995 and is headquartered in Shenzhen, China. Its business spans four major industries: automobile, rail transit, renewable energy, and electronics. The automobile segment is operated under the brand BYD Auto, which has established itself as a pioneer in the national and global electric vehicle market.

BMW AG

BMW AG was established in 1916 and is based in Munich, Germany. It is a well-established global luxu...

Ford Motor Company

Established in 1903, Ford Motor Company is headquartered in Michigan, United States and operates acr...

Volkswagen AG

Volkswagen AG was founded in 1937 and is headquartered in Germany. It is one of the leading automobi...

*Please note that this is only a partial list; the complete list of key players is available in the full report. Additionally, the list of key players can be customized to better suit your needs.*

Other key players in the China car market report are Dongfeng Motor Corporation Ltd., Hyundai Motor Company, Toyota Motor Corporation, Great Wall Motor Company Limited, Chery Automobile Co. Ltd., and SAIC Motor Corp., Ltd., among others.