February Auto Market Faces Cyclical Pressure While Exports Maintain Robust Growth

According to data from the China Association of Automobile Manufacturers, in February, the production and sales of automobiles in China reached 1.672 million and 1.805 million units, respectively, down 20.5% and 15.2% year-on-year. In the first two months of this year, production and sales totaled 4.122 million and 4.152 million units, respectively, down 9.5% and 8.8% year-on-year. Structurally, the passenger car and new energy vehicle markets are under more pressure, while commercial vehicles continue to recover. Export growth remains rapid, becoming a bright spot in the industry.

Industry experts generally believe that the current market is still in a transition phase involving policy continuation, consumption recovery, and supply adjustments. The future trend depends on factors such as local subsidy implementation, spring auto shows and promotions, and new product launches.

Looking at different segments, passenger cars remain the key variable influencing the overall auto market. In February, passenger car production and sales were 1.4 million and 1.536 million units, respectively, down 21.6% and 15.4% year-on-year. In the first two months, production and sales reached 3.462 million and 3.524 million units, down 12% and 10.7%. Nationwide, sales of four major types of passenger vehicles declined to varying degrees both month-on-month and year-on-year, reflecting the impact of the Spring Festival and demand rhythm changes on end consumption.

In the new energy vehicle sector, February production and sales were 694,000 and 765,000 units, respectively, down 21.8% and 14.2% year-on-year. New energy vehicles accounted for 42.4% of all new vehicle sales. In the first two months, production and sales totaled 1.735 million and 1.71 million units, down 8.8% and 6.9%. The share of new energy vehicles in new car sales was 41.2%. Notably, the overall pressure on new energy vehicles is mainly due to domestic market fluctuations. In the first two months, domestic sales of new energy vehicles reached 1.126 million units, down 27.5% year-on-year, with passenger new energy vehicles at 1.028 million units, down 30.3%. However, domestic sales of new energy commercial vehicles reached 99,000 units, up 25.3%. This indicates that while the new energy market remains highly penetrated, it is shifting from pure scale expansion to more evident structural competition.

The commercial vehicle market continued its recovery in the first two months of this year. Data shows that in February, production and sales of commercial vehicles were 273,000 and 269,000 units, respectively, down about 14% year-on-year. In the first two months, production and sales totaled 660,000 and 627,000 units, with growth of 7% and 3.9%. Specifically, truck sales in the first two months reached 563,000 units, up 5.8%; heavy-duty trucks sold 179,000 units, up 16.5%; medium trucks sold 22,000 units, up 16%. Overall, the recovery in the commercial vehicle sector is more related to logistics, infrastructure investment, tourism, and public transportation renewal needs, with a recovery pace more characteristic of industry cycles compared to passenger cars.

Notably, exports continue to be a vital support for the auto industry. In February, exports reached 672,000 units, up 52.4% year-on-year. In the first two months, cumulative exports were 1.352 million units, up 48.4%. Among these, passenger vehicle exports in the first two months totaled 1.174 million units, up 53.3%; commercial vehicle exports were 178,000 units, up 22.4%; and new energy vehicle exports reached 583,000 units, more than doubling (+100.1%). Specifically, in the first two months, pure electric vehicle exports were 377,000 units, up 100%; plug-in hybrid vehicle exports were 206,000 units, up 120%. This demonstrates that Chinese automotive products, especially new energy vehicles, still maintain strong competitiveness overseas.

From the perspective of industry structure, the top 15 companies (groups) by vehicle sales in the first two months sold a total of 3.875 million units, accounting for 93.3% of total auto sales. The top 10 companies (groups) sold 3.484 million units, representing 83.9%. Industry concentration remains high, indicating that leading companies are strengthening their advantages in technology, branding, supply chains, and overseas channels. However, with overall market volume contracting and domestic demand recovery remaining weak, companies need to focus not only on growth stability but also on profitability and competitive order.

Zhang Xiang, a visiting professor at Yellow River Science and Technology College, told Securities Daily that with continued policy efforts to stimulate consumption, ongoing industry “involution” competition regulation, and the gradual release of new products, auto sales are expected to gradually improve. However, for the industry to achieve steady recovery, a rebound in consumer confidence and further optimization of the market ecosystem are essential.