As the automotive industry undergoes a deep structural shift, the transition from traditional mechanical vehicles to intelligent mobility platforms is accelerating. Amid this transformation, Chinese local manufacturers are advancing on two fronts: doubling down on the domestic market by rapidly launching innovative models and software features tailored to local consumer needs, and, at the same time, looking outward and advancing on their global expansion strategies.

This paper offers a focused analysis of key macroeconomic trends including market dynamics, production forecasts, and overseas strategies including:

• Economic outlook: Navigating opportunities and challenges
• 2025 light vehicle output expected to grow by 2%
• Continued polarization across the market landscape in the short-term
• Three key characteristics shaping the New Energy Vehicle (NEV) segment in 2025
• Price competition shifting from aggressive discounting to greater stability
• Strategic outlook as to the global expansion of Chinese automakers

Key Takeaways

• China's Government Work Report forecasts GDP growth to remain around 5% in 2025. To counter external impediments, the government will continue to implement flexible fiscal and monetary policies.
• S&P Global Mobility projects that light vehicle production in China will increase by 2% in 2025.
• With the continued rollout of new NEV models, the extension of the vehicle trade-in program, and financial support from special government bonds, new energy vehicles are expected to remain one of the primary drivers of overall market growth in 2025.
• In the short term, market stratification is likely to continue. Leading players are expected to further consolidate their positions through technological leadership and service differentiation, while joint-venture and smaller brands may face increased competitive pressures.
• The standardization of intelligent driving has become a central theme in mainland China's automotive market in 2025, although its realworld effectiveness in lower-tiered cities has yet to be validated.
• Domestic premium brands are aggressively reshaping the premium segment through competitive pricing and advanced technologies. The competitive focus is gradually shifting from foreign premium marques to internal rivalries among local brands.
• As price wars begin to stabilize, leading players such as BYD and Tesla are shifting their strategies from aggressive discounting toward revenue and profit optimization.
• According to S&P Global Mobility, mainland China's light vehicle exports are predicted to account for more than 20% of total vehicle sales by 2030.
• To address rising overseas demand and increasing trade uncertainty, more Chinese automakers are setting up localized production facilities abroad. The globalization of manufacturing ability has become an irreversible trend.
  
  

Contributing Editors

• Alison He, Analyst, Light Vehicle Production Forecast, Greater China, S&P Global Mobility.
• Serena Shen, Analyst, Light Vehicle Sales Forecast, China, S&P Global Mobility.
• Hui Song, Senior Consultant, China Automotive Advisory, S&P Global Mobility.