China auto sales fall 0.8% in Oct 2025 as incentives fade
A. Krivonosov
China's auto market fell 0.8% in Oct 2025 as subsidies and trade-in bonuses expired, pressuring German brands as local EV rivals rise; policy now steers recovery.
China’s auto market has posted its first sales decline in more than a year. According to the China Passenger Car Association (PCA), deliveries to end customers in October 2025 slipped 0.8% year over year. It’s the first drop since August 2024, not counting the seasonal dip in January during Lunar New Year.
The pullback tracks the expiry of subsidy programs. In many regions, including Shanghai, trade-in bonuses for scrapping older cars have wound down—previously they helped keep demand humming. Over 2025, authorities approved more than 10 million applications for such payouts, which kept ten-month sales growth at 8.3%. When those supports fade, the market’s lift tends to go with them.
The hit is most visible among German brands. Volkswagen has been drawn into a price fight with local electric-car makers, while Mercedes-Benz, BMW, and Porsche are reporting double-digit declines. Wealthier Chinese buyers are turning more often to domestic marques that pair current tech with keener pricing. In this climate, brand heritage carries less weight than software and value, and the pecking order is being reshuffled fast.
Amid a crisis in the construction sector and weakening consumer purchasing power, China—the world’s largest car market—is navigating a tough reset. Experts warn that if support measures are not revived, the slowdown could extend into 2026. The direction of policy now looks set to dictate the pace of any recovery.
