China's auto industry achieved record revenue of CNY11.2 trillion in 2025, but profit margins fell to historic lows, highlighting market challenges.
China's auto sector reported record revenue of CNY11.2 trillion (US$1.6 trillion) in 2025, up 7.1 per cent year-on-year. However, profit margins fell to historic lows, according to reports from Caixin.
Data from the China Passenger Car Association (CPCA), citing the National Bureau of Statistics, showed that profit margins averaged 4.1 per cent last year. This figure is below the 5.9 per cent industrial sector average and down from a peak of 8.99 per cent in 2014. In December, the margin dropped to 1.8 per cent, marking the lowest level in five years outside of major disruptions.
CPCA secretary-general Cui Dongshu stated that government subsidies for vehicle trade-ins have boosted demand. However, he noted that productivity gains remain weak compared to other consumer sectors.
New-energy vehicles (NEVs) are reshaping the market by prioritizing volume over immediate profit. NEV production rose by 25 per cent to 16.52 million units in 2025, while the output of internal combustion engines fell by one per cent to 18.25 million units.
