China’s market and production trends show resilience – GlobalData

In a sign of market resilience, China’s light vehicle (LV) market defied typical seasonal sluggishness to post strong performance in September 2025. Total sales reached approximately 2.5 million units, reflecting a year-on-year increase of 11%. The expansion was largely driven by the photovoltaic (passenger vehicles – automobiles) segment, which grew 10% year-on-year to 2.3 million units.

Complementing this, there was a notable 23% year-on-year increase in sales of light commercial vehicles, which amounted to 216,000 units. On a year-on-year basis, the market maintained its momentum with a 12% expansion in volumes in January-September compared to the same period in 2024. The light commercial vehicle segment delivered a strong performance in September, especially within the light truck category. While the overall light truck market recorded a 2.5% year-on-year increase, a central pillar of this expansion has been the rapid electrification of the commercial vehicle sector. The seasonally adjusted annualized sales rate (SAAR) for September was 28.7 million units, remaining at a historically high level and reinforcing the pattern of a weak start, strong middle and stable end to the year.

In terms of production, construction of low-voltage vehicles in China reached 3.2 million units in September, a solid year-on-year increase of 15.1%. Photovoltaics, which accounted for 90% of total production, increased 14.7% year-on-year to 2.9 million units, underscoring strong consumer demand and market resilience. CV production also performed well, increasing 19.0% year-on-year to 291,000 units. Chinese domestic OEMs produced 2.3 million units, a notable year-on-year increase of 17.7%, while joint venture OEMs also posted gains of 9.0%. In the whole of January-September, the global BT market expanded by 12.5% ​​compared to the same period of the previous year.

In September, China’s light vehicle exports reached 611,000 units, representing a strong year-on-year increase of 18.2% and a month-on-month increase of 7.1%. Photovoltaics led the expansion, with overseas shipments increasing 19.5% year-on-year to 552,000 units. CV exports also grew steadily, increasing 7.0% year-on-year to 58,000 units. From January to September, shipments totaled 4.6 million units, 12.6% more than in the same period of the previous year. As such, full-year volumes are on track to set a new record, reinforcing China’s role as a key player in global automotive trade.

Trade subsidies in the country are tightening. After first appearing in Sichuan, the lottery system was rolled out in key regions such as Shanghai, effectively making it a de facto national policy by the fourth quarter of 2025. The shift to a limited biweekly draw is a deliberate move by the government to rein in fiscal spending amid overwhelming application volumes. According to official data, as of October 22, 2025, applications for subsidies under the national car exchange program had exceeded 10 million. Given this high demand, policy adjustments are understandable.

The synchronized implementation of lottery systems in various regions indicates a coordinated top-down effort to limit total fiscal expenditure. The announcement of these limited systems likely drove significant demand into early October, contributing to strong September numbers. During the remainder of the fourth quarter, purchasing behavior may become more volatile, oscillating between application cycles as consumers rush to apply for each biweekly lottery drawing. The uncertainty introduced by the lottery could temporarily reduce the conversion of purchase intentions for some consumers who can no longer rely on receiving the subsidy. This adds a new layer of complexity to the purchasing process. While Shanghai and Sichuan are leading indicators, we expect other provinces facing similar budget and demand pressures to quickly follow suit. The timeline for these regional launches will be a critical variable affecting the national sales trajectory.

From a production perspective, the recent Nexperia incident demonstrates a retreat from globalization, where geopolitical factors and tariff barriers are becoming the normal limitations to stable supply. The disruption arises from a geopolitical dispute. In late September, the Dutch government took control of Nexperia, a chipmaker based in the Netherlands but wholly owned by China’s Wingtech. In response, China imposed export controls on Nexperia products made in its Chinese facilities, which account for about 70% of its total production.

We believe the Nexperia incident will have limited direct impact in the short term on Chinese automakers; They may even gain market opportunities due to supply difficulties faced by foreign competitors. However, in the long term it will serve as a wake-up call, accelerating internal substitution and self-sufficiency in core components of China’s automotive supply chain, such as chips. We expect Chinese automakers to address supply chain weaknesses and collaborate more closely with domestic chipmakers to build a more resilient industrial chain.

This article was first published on GlobalData’s dedicated research platform, the Automotive Intelligence Center..

“China’s production and market trends show resilience: GlobalData” was originally created and published by Just Auto, a brand owned by GlobalData.

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