13:37 28-12-2025

China’s auto industry grows in 2025, but price wars squeeze margins

China’s auto industry is scaling up in 2025, but earning less. According to data presented by CPCA secretary general Cui Dongshu and analyzed by SPEEDME.RU, industry profitability stood at just 4.4% in January–November 2025—the second-lowest level on record and only 0.1 percentage points above 2024’s low of 4.3%. On a per-vehicle basis, the picture is even clearer: average revenue across the value chain reached 322,000 yuan, while gross profit was about 14,000 yuan, roughly $2,000.

The paradox is that total turnover has already surpassed 10 trillion yuan, up 8.1% year on year, yet costs climbed faster—by 9% to 8.84 trillion. Profit reached 440.3 billion yuan (+7.5%), but two forces are eroding it: rising expenses (including battery materials and labor) and fierce competition. Price wars that began in the new energy segment have spilled over to gasoline models, compressing margins for everyone. In practice, scale alone no longer guarantees healthier returns.

The strain is visible in company reports as well: at Great Wall Motor, nine-month revenue grew by nearly 8%, but net profit fell by almost 17% amid investment in sales channels and pricing battles. Even so, the electric side keeps widening its footprint: from January to November, 31.09 million vehicles were built (+11%), including 14.53 million new energy models (+27%), with NEV penetration at 47%. Volume is rising precisely where the fight is fiercest, which helps explain why profitability continues to lag.