China’s PV retail sales fall 14% in December

Group 1: Market Performance - Retail sales of passenger vehicles in China declined by over 14% year-on-year to 2.261 million units in December 2025 from 2.635 million units in December 2024 [1] - This marks the third consecutive month of decline, following a strong rebound driven by government sales incentives and aggressive price competition among local manufacturers [2] - Over the full year, passenger vehicle retail sales rose by 3.9% to 23.774 million units from 22.892 million units in 2024, with new energy vehicles (NEVs) sales increasing by 17.6% to 12.82 million units [4] Group 2: Economic Context - China's economy is estimated to have expanded by 5% year-on-year in the fourth quarter of 2025, up from 4.8% in the third quarter, primarily due to strong manufacturing and export growth despite ongoing trade tensions with the US [3] - The Chinese government confirmed the continuation of its vehicle trade-in subsidy programme in 2026 to drive domestic consumption [5] - GlobalData forecasts a slight increase in light vehicle retail sales to 27.63 million units in 2026, up from 27.30 million units in 2025 [5]