Motors and Markets 2025: China's Role in the APAC Automotive Market

Key Drivers Behind Automotive Growth in APAC

China's automotive industry is entering a slower growth phase after years of strong performance fueled by government policies and pent-up demand. With an anticipated 1%-3% increase in light-vehicle demand in 2025, growth is subdued compared to the high base of 2024. However, the electric vehicle (EV) market continues to thrive with a projected 15%-20% year-over-year sales increase in 2025, thanks to improved infrastructure and changing consumer preferences for larger EV models. This sets the stage for investors to reassess market leaders like Geely, a standout stock poised for long-term growth in China's competitive automotive sector.

What Are the Latest Trends in China’s Automotive Market?

China's government incentives, such as trade-in subsidies and extended scrappage schemes, are helping to stabilize automotive demand. However, these measures have also pulled forward consumers' purchases, which may contribute to slower growth in 2025. Despite this, the focus on transitioning to EVs, supported by favorable policies like extended tax rebates for NEVs (New Energy Vehicles) through 2027, indicates that EVs will further gain market share from traditional internal combustion engine vehicles.

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