Retail sales of passenger vehicles in China, including sedans, MPVs, and SUVs, declined by over 14% year-on-year to 2.261 million units in December 2025 from 2.635 million units in the same month last year, according to data compiled by the China Passenger Car Association (CPCA).
This was the third consecutive month of decline for this market, after rebounding strongly for over a year, driven by government sales incentives and aggressive price competition among local manufacturers. The market is now looking somewhat saturated, as it comes up against strong year-earlier volumes, while domestic consumer sentiment remains cautious overall.
China’s economy is estimated to have expanded by 5% year-on-year in the fourth quarter of 2025, up from 4.8% in the third quarter, driven mainly by strong manufacturing and export growth despite the ongoing trade tensions with the US.
Over the full year, passenger vehicle retail sales in China rose by 3.9% to 23.774 million units from 22.892 million units in 2024. Sales of new energy vehicles (NEVs) increased by 2.6% to a record 1.337 million units in December, resulting in a 17.6% rise to 12.82 million units over the full year from 10.90 million in 2024, while sales of ICE passenger vehicles fell by 9% to 10.954 million units from 11.992 million units previously.
The Chinese government confirmed it will continue its vehicle trade-in subsidy programme in 2026, as part of its broader policy of driving up domestic consumption. GlobalData is forecasting just a slight increase in light vehicle retail sales to 27.63 million units in the country in 2026, including light commercial vehicles up to 6 tons gross vehicle weight, up from 27.30 million units in 2025.
“China’s PV retail sales fall 14% in December” was originally created and published by Just Auto, a GlobalData owned brand.
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