In the past 3 years, China's auto market has been hot, attracting many new brands leading to an internal competition trend. Seeing the limitless internal competition may trigger consumers' mindset of delaying purchases to enjoy discounts, cooling down the auto market next year.
Expecting consumers to postpone their car purchase decisions in anticipation of further price reductions for existing non-domestic models, CICC analysts predict that China's total auto sales next year will decrease by 8% to 0.73 million units from this year's 0.79 million, due to the internal competition.
"We believe that with the high base effect becoming evident and no bullish factors supporting it, next year's auto market is expected to cool down and will struggle to maintain the current high sales levels."
In fact, there have been signs of a decline in auto sales. Looking back, in November, the country's auto sales were 0.0675 million units, already declining by 3% monthly, and compared with the same period last year, it has dropped by 8%.
Toyota's sales decreased by 6.7%; the sales of the second domestic car and Baoteng, the two domestic car manufacturers, were also poor last month, decreasing by 5.7% and 5.0% respectively.
That being said, analysts pointed out that Perodua's sales from the beginning of the year to now are close to 0.326 million units, expected to exceed its 2023 full-year sales of 0.33 million units, further refreshing the annual sales record.
Entering 2025, prolonged price wars in the auto industry and soft orders have led analysts to lower their expectations.
Foreign cars are facing more impact.
However, analysts still emphasize that the decline in car sales is mainly from non-domestic brands, especially as new entrants like China's Auto Manufacturers join the market, intensifying industry competition.
"Therefore, I...

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