More than 30,000 car dealers in mainland China are facing another bleak year in 2025, with many turning from profit-generators into corporate failures in two years under a debilitating price war and an e-commerce onslaught.
Advertisement
More than half of the industry’s participants failed to achieve their sales targets for 2024, the China Automobile Dealers Association (CADA) said in an end-December report. Most of them are either suffering huge losses or struggling with a capital crunch, it added.
The discount war among Chinese manufacturers involving petrol-powered and electric cars resulted in 177.6 billion yuan (US$24.3 billion) of losses between January and November, CADA said, worsening from 84.5 billion yuan in the year-earlier period.
About 27 per cent of the dealers nationwide attained to less than 70 per cent of their projected sales last year, according to CADA, while some 4,000 dealers, or 10 per cent, have shut down due to a financial squeeze, it added.
“The association expects the auto market outlook to be uncertain in the future,” it said in the report, adding that weak January deliveries are likely given the approaching eight-day Lunar New Year holiday from January 28. “All dealers should rationally assess market demand in their business operations.”
Advertisement
Steep discounts by car manufacturers have persisted over the past two years, despite calls by industry leaders to halt price competition. Producers cut prices on 195 models – including petrol-powered, pure electric and hybrids from January to November last year, up from 150 models in 2023, the China Passenger Car Association said.
The average price of a pure electric car was reduced by 10 per cent, or 20,000 yuan, while hybrids were discounted by 4.3 per cent, it added. Consumers were able to save 10,500 yuan per unit on average. Nationwide sales rose 4.7 per cent to 20.3 million cars in the first 11 months last year, according to industry data.