Core Insights - The Chinese passenger car market experienced a significant decline in December 2025, with retail sales dropping to 2.261 million units, a year-on-year decrease of 14.0%, marking the third consecutive month of sales decline since October 2025 [2] - The overall retail sales for the year reached 23.744 million units, reflecting a year-on-year growth of 3.8%, slightly above the previous forecast of 2% [2] Market Performance - December sales were particularly weak in the fuel vehicle segment, which saw a decline of 30%. Although the new energy vehicle (NEV) sector did not experience a drop, its growth significantly slowed, with NEV retail sales at 1.337 million units, a year-on-year increase of only 2.6% [3] - The penetration rate of NEVs surpassed 50% for the first time in 2025, reaching 54%, with December's penetration rate at 59.1%, an increase of 9.6 percentage points year-on-year [3] Brand Analysis - In December, the penetration rate of NEVs among domestic brands was 80.9%, while luxury brands had a penetration rate of 39.1%, and mainstream joint venture brands only reached 8.2% [4] - The market share of domestic brands continued to grow, reaching 65% for the year, an increase of 4.8 percentage points year-on-year. In December, domestic brand retail sales were 1.46 million units, down 11% year-on-year [5] Export Performance - The export segment showed strong growth, with December passenger car exports (including complete vehicles and CKD) at 588,000 units, a year-on-year increase of 46.2%. For the entire year, exports totaled 5.739 million units, up 19.7% [5] Future Outlook - Despite the recent sales decline, there are positive factors such as the introduction of new models and a reduction in aggressive price cuts. The forecast for January 2026 anticipates a slight year-on-year sales increase, with total market sales projected at approximately 35.5 million units for the year, a 2% increase [6]

Group 1 - The Chongqing government will launch a comprehensive subsidy policy for vehicle scrapping and replacement, as well as for home appliances and digital products starting January 1, 2026 [2] - The first batch of subsidies for 2026 includes 210 million yuan for vehicle scrapping, 555 million yuan for vehicle replacement, 450 million yuan for home appliances, and 301 million yuan for digital and smart products [2] Group 2 - Consumers can receive a one-time subsidy of up to 20,000 yuan for scrapping eligible gasoline and diesel vehicles registered before specific dates and purchasing qualifying new energy or low-displacement fuel vehicles [3] - The subsidy for scrapping eligible fuel vehicles and purchasing new energy vehicles is set at 12% of the new vehicle sales price, while the subsidy for low-displacement fuel vehicles is 10%, with maximum amounts of 20,000 yuan and 15,000 yuan respectively [3][4] Group 3 - For vehicle replacement, consumers can receive a one-time subsidy of up to 15,000 yuan for purchasing qualifying new energy vehicles and up to 13,000 yuan for low-displacement fuel vehicles [5] - The subsidy for new energy vehicles is 8% of the new vehicle sales price, while for low-displacement fuel vehicles, it is 6% [5] Group 4 - Consumers can receive a 15% subsidy on the sales price of energy-efficient home appliances, with a maximum of 1,500 yuan per item, and can claim one subsidy per category [6] - For digital products like smartphones and tablets, a 15% subsidy is also available, capped at 500 yuan per item, with a limit of one subsidy per category [6] Group 5 - The subsidy policy will be effective from January 1, 2026, to December 31, 2026, and will operate on a "total amount control, balanced use, and first-come, first-served" basis [6]