China Car Sales Dip To Three-Year Low, Exports Surge

China’s car market hit a rough patch in 2025, with domestic sales slowing to their weakest pace in three years. Last month alone, passenger car sales dropped 14.5% from a year earlier, falling to 2.28 million units, marking the biggest dip since Feb 2024, according to the China Passenger Car Association (CPCA). 

For the full year, overall car sales still grew 3.9%, but that’s down from 5.3% growth in 2024, signaling a clear slowdown.

Despite the domestic slump, China’s automakers are finding their silver lining overseas. Exports of made-in-China cars beat expectations, jumping 19.4% to 5.79 million units. 

Electric and plug-in hybrid vehicles (EVs and PHEVs) were a huge part of that, with exports up 86% to 2.42 million units, a surprising surge considering the CPCA had forecast zero growth.

EVs and PHEVs also outsold traditional gasoline cars in China for the first time on an annual basis, even though growth in new energy vehicle sales slowed to 17.6%, down from a blistering 40.7% in 2024. 

Domestic demand weakened in the last quarter as government subsidies for trade-ins were reduced or suspended, leaving automakers scrambling in an already hyper-competitive market.

Top Chinese automakers, including Changan, FAW, Li Auto, and Nio, fell short of their 2025 sales targets. BYD, China’s largest carmaker, barely hit its adjusted target of 4.6 million vehicles, marking its slowest sales growth in five years. 

But overseas markets are helping soften the blow with BYD sold over 1 million cars abroad, overtaking Tesla as the world’s top EV maker last year.

With EV adoption still rising globally and exports showing no signs of slowing, China’s automakers are leaning on overseas growth to keep the industry moving.

Closer to home, Malaysia’s car market is also feeling the ripple effects. Local EV sales are picking up slowly, but overall new car registrations have softened, partly due to higher vehicle prices and the end of government incentives for some models.  

Brands like BYD and Chery are seeing strong interest from urban buyers, especially in the EV and hybrid segments, while traditional petrol models face more competition and slower growth. Analysts say the Malaysian market is following a similar pattern to China which is slower overall sales but faster adoption of new energy vehicles.

Source: Reuters.