The latest data released by the China Passenger Car Association (CPCA) showed that China's passenger car market retailed 1.386 million vehicles in February, a year-on-year increase of 26%.

Driven by policy support, the recovery of consumer confidence and the optimization of auto companies' marketing strategies, the cumulative retail sales in January and February reached 3.179 million vehicles, an increase of 1.2% year-on-year. The penetration rate of new energy vehicles quickly rebounded to 49.5%, and the retail share of domestic brands exceeded 65%. The market structure is accelerating its transformation towards new energy and localization.

In terms of power type, new energy passenger car sales in February reached 686,000 units, up 79.7% year-on-year and down 7.8% month-on-month. The penetration rate rebounded quickly from the pre-holiday low to 49.5%, up 15 percentage points from the same period last year. Among them, the penetration rate of new energy vehicles of domestic brands was as high as 70%, that of luxury cars was 23%, and that of mainstream joint venture brands was only 4%.

Pure electric vehicles accounted for 57.6% of retail sales, up 69.6% year-on-year. A00-class economy cars performed well, with sales surging 164% year-on-year, accounting for 25% of pure electric vehicles. Plug-in hybrid models grew rapidly, with narrow plug-in hybrid sales increasing by 137.7% year-on-year, accounting for 34.8%, becoming the main source of growth in the new energy market. Extended-range models were affected by price competition, with only a slight increase of 7.4% year-on-year, and market share shrinking to 7.6%.

The fuel vehicle market has gradually stabilized under the guidance of moderate policies, and the promotion intensity in February dropped by 0.2 percentage points from the previous month to 21.7%. The consumption structure showed a trend of high-end, and the performance of Class B fuel vehicles and luxury cars was stable.

In terms of brand camp, domestic brands sold 910,000 vehicles in February, a year-on-year increase of 51%, and a market share of 65.6%, an increase of 10.6 percentage points year-on-year. Leading companies such as BYD, Geely, and Chery continue to expand their advantages through new energy transformation, and plug-in hybrid models have made significant contributions to sales. In terms of exports, exports of domestic brand new energy vehicles increased by 111%, accounting for 35% of total exports, but fuel vehicles are still the main export, accounting for 65%.

Mainstream joint venture brands sold 330,000 vehicles, down 2% year-on-year, and their market share further declined to 23.8%. However, sales of mainstream joint venture brands were under pressure, with the retail shares of German, Japanese, and American brands falling by 4.3, 3.7, and 1.4 percentage points, respectively. The penetration rate of new energy vehicles for joint venture brands was only 3%, and the pace of transformation was slow. Only a few automakers, such as GAC Honda and GAC Toyota, achieved month-on-month growth by increasing investment in hybrid models.

Luxury car sales were 150,000 units, down 8% year-on-year, with a market share of 10.8%. The penetration rate of new energy vehicles increased to 23%, but the sales of traditional fuel luxury cars fell by 17% year-on-year due to the slowdown in consumption upgrades.

In terms of automaker rankings, BYD topped the list with a retail sales volume of 206,000 vehicles, a year-on-year increase of 73.2% and a market share of 14.8%. Its advantages in both pure electric and plug-in hybrid electric vehicles are outstanding, especially in the A00-class economy electric vehicle market. Combined with the increase in exports, it has consolidated its leading position.

Geely ranked second with 180,000 vehicles sold, a year-on-year increase of more than 60% and a market share of 13%. Through the strong performance of plug-in hybrid models and the expansion of export markets, Geely has become one of the fastest growing domestic brands.

FAW-Volkswagen ranked third with 98,000 vehicles sold, becoming the only joint venture automaker to enter the top three. Although its sales volume declined year-on-year, it still maintained strong competitiveness thanks to the stable market base of fuel vehicles and the gradual penetration of new energy models (such as the ID. series).

Chery ranked fourth with 82,000 vehicles, a significant year-on-year increase. Its new energy vehicle models and export business grew rapidly, especially in the field of A0-class electric vehicles, becoming a representative of the globalization strategy of independent brands.

Changan Automobile ranked fifth with 79,000 vehicles sold. It continued to make breakthroughs in the new energy market through intelligent configuration upgrades and price reduction strategies (such as models such as the Deep Blue SL03), but faced fierce competition from leading brands such as BYD.

SAIC Volkswagen ranked sixth with 68,000 vehicles. On the one hand, its new energy vehicle models are gradually increasing in volume, but on the other hand, its fuel vehicle market share continues to be squeezed by domestic brands, and the pressure of transformation is still great.

SAIC-GM-Wuling ranked seventh with 52,000 vehicles, and A00-class models such as Hongguang MINI are still the main force.

GAC Toyota ranked eighth with 42,000 units. The ninth-generation Camry hybrid version was reduced by 30,000 yuan and equipped with 8155 chips, trying to regain the market with intelligence and cost-effectiveness, but the penetration rate of new energy vehicles was only 3%, and the transformation was lagging behind.

FAW Toyota ranked ninth with 41,000 vehicles sold, a year-on-year increase of 41.8%, becoming one of the few joint venture brands to achieve growth against the trend.

Mercedes-Benz ranked in the top ten with 35,000 vehicles. Although the penetration rate of new energy vehicles in luxury cars has increased to 23%, the demand for traditional fuel luxury cars is weak, reflecting the weakening momentum of consumption upgrading.

With their new energy technology and export advantages, domestic brands continue to erode the share of joint ventures. Among the top ten, six are domestic brands, with a combined share of over 40%. In the future, policy subsidies, intelligent technologies (such as DeepSeek low-computing AI applications) and export market expansion will become key variables in the competition among automakers.

In addition, the retail share of new power brands reached 19.9%, and Xiaomi SU7 delivered 24,000 units, driving the new power share up 2.6 percentage points year-on-year. Sales of brands such as Xpeng, Ideal, and Leapmotor all exceeded 20,000 units, but brands such as Weilai are facing competitive pressure.

In March 2025, the passenger car market will usher in a period of intensive efforts for "policy + new products". The scrapping and replacement subsidies are expected to release nearly 400 billion yuan of consumption potential. Combined with the low price of lithium carbonate, the cost advantage of new energy vehicles is further highlighted. Domestic brands are expected to consolidate their leading position by relying on intelligent and export advantages such as DeepSeek.

The China Passenger Car Association analyzed that in the future, the policy orientation of "oil and electric vehicles are equally strong" and the export of small electric vehicles will become key issues in the industry. As the auto market shifts from "price war" to "value war", technological innovation and consumer experience upgrades will become the core of competition.