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

The China car market, volume at 30.09 Million Units in 2024. The market is projected to grow at a compound annual growth rate (CAGR) of 4.00% from 2025 to 2034, potentially reaching 44.54 Million Units by 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

Popular sports festivals, integration of advanced technologies, and rising demand from the urban population increase the China car market value.

September 2024

Zeekr, one of the major China car market key players, announced the launch of its midsize electric SUV, the Zeekr 7X, in China. The model offers dual battery options, with a mileage of 605 to 780 kilometres. The initial prices were kept low to compete with new budget-friendly models fromTesla, Xpeng and Nio.

May 2024

The Chinese electric vehicle manufacturer, Nio, has announced plans to launch one new car model every year under its Onvo brand, known globally for affordability and sustainability. The EV cars will be priced similarly to gasoline cars, targeting middle-class customers with larger families.

May 2024

BYD launched its latest generation of plug-in technology, achieving an impressive fuel consumption of 2.9 litres per 100 km on depleted batteries. However, purely on gasoline, the technology offered a fuel consumption of 3.8 litres in 100 kilometres. This new technology ensures a driving range of over 2,000 kilometres with a fully charged battery and a full gasoline tank.

March 2024

Xiaomi launched its first electric car, the ultra-speed SUV 7, in China, featuring a220kW rear-wheel drive motor. It offers a range of 1200 kilometres, owing to the high-performance E-motor HyperEngine V8s, and can reach a speed of 27,200 rpm. The overall output of the vehicle was estimated at 425kW.

Rising Urban Population is Fuelling the Growth of the China Car Market

China’s urban population accounts for the largest consumer base for car manufacturers and retailers owing to high disposable income, enhanced standard of living, and the need to own a personal vehicle. According to the World Bank, this demographic group has been projected to increase up to 70% of the total population by 2030, which will likely lead to a significant rise in car sales in the coming years.

Popular Sports Festivals Boosting Demand of the China Car Market

China has become an international hub for sports car festivals, driving sales of new, high-performance sports cars in the country. Some of these events, which attract thousands of national and international spectators every year, include the Chinese Grand Prix, the Shanghai Auto Culture Festival and the China Automobile and Motorcycle Sports. For instance, the 2024 China Automobile and Motorcycle Sports event, held between August 28th to September 1st, saw 248 drivers compete in various events, such as the China Drifting Championship and the China Touring Car Super Cup, along with 8,000 spectators each day.

Integration of Advanced Technologies is Fuelling the China Car Market Development

The integration of advanced technologies is significantly fueling the demand of China car market, as consumers increasingly demand vehicles that offer cutting-edge features in safety, convenience, and performance. To meet their growing needs, automakers are rapidly adopting technologies such as autonomous driving systems, AI-powered infotainment, and advanced driver-assistance systems (ADAS). Toyota announced its plans to launch the first electric car model featuring an advanced autonomous driving system for the Chinese market in 2025.

Government Regulations on Discarding Worn-Out Cars are Impacting the China Car Market Revenue

The Chinese government has imposed stringent regulations on discarding worn-out cars, citing the country’s deteriorating environmental conditions and the rapid depletion of natural resources. As cars age and become less fuel-efficient, they fail to meet the safety and pollution control standards set by authorities, leading to environmental harm. As a result, the disposal of these vehicles creates opportunities for new sales of cars, enhancing the overall China car market growth. In a recent development towards this direction, fourteen Chinese government departments, including China's Ministry of Commerce, jointly released an action plan to promote the replacement of all passenger vehicles, including cars, that meet China 3 emissions standards or lower.

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

The report titled “China Car Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

Market Breakup by Vehicle Type

• Hatchback
• Sedan
• Sports Utility Vehicle

Market Breakup by Propulsion Type

• Hybrid and Electric Vehicles
• BEV
• FCEV
• HEV
• PHEV
• ICE
• CNG
• Diesel
• Gasoline
• LPG

Market Breakup by Region

• North China
• East China
• Southwestern China
• Southcentral China
• Northeast China
• Northwestern China
• 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 luxury car company, operating through four major brands: BMW, Rolls Royce, MINI, and BMW Motorrad. While having its strongest footholds in the mobility industry, the company specialises in the development of vehicles with advanced vehicles with integrated technologies such as AI and IoT.

Ford Motor Company

Established in 1903, Ford Motor Company is headquartered in Michigan, United States and operates across the automotive, financial services, and mobility industries. The company specialises in a wide range of vehicles, including SUVs, cars, trucks, vans, EVs and hybrid vehicles, performance vehicles, commercial vehicles, and future vehicle technologies.

Volkswagen AG

Volkswagen AG was founded in 1937 and is headquartered in Germany. It is one of the leading automobile manufacturers in Europe and has significant market shares globally. The group consists of ten different brands, each specialising in the development of e-mobility vehicles, self-driving cars, connected cars, and vehicles equipped with advance technologies such as AI and IoT.

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.