January 28th news, data from the China Passenger Car Association (CPCA) shows that in 2025, the sales profit margin of China's auto industry fell to 4.1%, reaching a historical low.
In 2025, the scale of China's automobile production and sales continued to expand, with cumulative totals reaching 34.531 million and 34.4 million units respectively, representing year-on-year growth of 10.4% and 9.4%.
Annual production and sales of passenger vehicles both exceeded 30 million units for the first time, while commercial vehicle sales rebounded to over 4 million units. The penetration rate of new energy vehicles further increased, with new vehicle sales accounting for 52.3% in December and 47.9% for the entire year.
Driven by production and sales growth, the industry's revenue increased by 7.1% year-on-year to 11.18 trillion yuan, but cost growth was faster, increasing by 8.1% year-on-year to 9.85 trillion yuan, resulting in a full-year profit of only 461 billion yuan, a slight increase of 0.6% year-on-year.
In comparison, this profit margin is not only lower than the 4.3% in 2024, but also significantly lower than the average operating income profit margin of 5.31% for industrial enterprises above designated size in 2025, as well as the average profit margin of 5.9% for downstream industrial enterprises.
In December 2025, single-month data shows the automotive industry's profit margin was only 1.8%, a year-on-year decrease of 2.3 percentage points, and a significant weakening trend compared to the previous month. Industry revenue decreased by 0.8% year-on-year, while costs increased by 0.8% year-on-year, highlighting the pressure on profitability.
The decline in industry profit margins stems from two factors: first, intensified market competition leading to price concessions, and second, the sustained high prices of commodities exerting cost pressures.
At the same time, enterprises' R&D investment in electrification and intelligence, coupled with fixed expenses such as channels and marketing, further squeezes profit margins.
