H. Yoo
Research expert covering South Korea
Automotive manufacturing industry in China - statistics & facts
China remains the world’s largest automotive manufacturing country and automotive market since 2009. Annual vehicle production in China accounted for a third of worldwide vehicle production, which exceeds that of the European Union or that of the United States and Japan combined.
In the first decades of the PRC, China’s automobile production set off with an emphasis on commercial vehicles for industry and military purposes. The automobile industry in China did not gain momentum until the beginning of the 1990s. The rapid growth of the domestic market has also further accelerated the automobile industry in China. Newly registered passenger vehicles amounted to about 21.8 million units in 2023, which remained generally stable since around 2019. In line with this development is vehicle sales, where the increasing trend has unfortunately reversed between 2018 and 2020, but recovered since 2021.
In the first decades of the PRC, China’s automobile production set off with an emphasis on commercial vehicles for industry and military purposes. The automobile industry in China did not gain momentum until the beginning of the 1990s. The rapid growth of the domestic market has also further accelerated the automobile industry in China. Newly registered passenger vehicles amounted to about 21.8 million units in 2023, which remained generally stable since around 2019. In line with this development is vehicle sales, where the increasing trend has unfortunately reversed between 2018 and 2020, but recovered since 2021.
Domestic brands increased market share
China’s automobile market has attracted many well-established foreign brands to invest in automobile production in China. However, most foreign brands were only allowed to produce their vehicles in China by establishing joint ventures with domestic automobile manufacturers, which the government has recently announced plans to loosen gradually. Due to technical development and lower production costs, several indigenous brands of China’s leading automobile manufacturers have also gained more and more popularity in the automobile market. Most vehicles manufactured in China are sold within the country, while manufactured vehicles for exports contributed approximately 18.7 percent to China’s overall auto production volume in 2024.Promoting new energy vehicle productions
In order to promote new energy vehicle (NEV) sales, China has introduced various measures, such as tax exemptions, subsidies for car purchases and a requirement for government departments to buy more new energy cars, as a way to save energy and reduce air pollution. NEV manufacturers also received financial support from the government to reduce their R&D and production costs. China’s production of NEVs grew from about 17,500 units in 2013 to over 12.89 million units in 2024. The growth and emphasis on NEVs in China is not only a measure to reduce urban air pollution, but can also be seen as a way for Chinese automakers to become globally competitive against traditional manufacturers specializing in vehicles with internal combustion engines.
