According to the usually well-informed news site CarNewsChina (CNC), the profit margin of China’s auto industry was 4.4% in 2025 (January to November), at some $2,000 per vehicle (€1,700), the second lowest in history.
The lowest in history was 2024, with 4.3%. Obviously, Chinese car manufacturers have some work to do if they want to return their profits to ‘normal’ levels.
From January to November 2025, the Chinese automotive industry’s profit margin was only 4.4%, the second lowest in history, according to data released by Cui Dongshu, Secretary-General of the China Passenger Car Association (CPCA).
The average revenue per vehicle in the industry chain was 322,000 yuan (€38,650), but the gross profit per vehicle was only 14,000 yuan (€1,680).
Production up, profits down
This performance can be characterized as ‘scale growth but pressure on profits’. Despite the industry’s revenue exceeding 10 trillion yuan (€1.2 trillion), a year-on-year increase of 8.1%, the costs were 8.84 trillion yuan (€1.06 trillion), an increase of 9%, and profits were 440.3 billion yuan (€52.8 billion), a year-on-year increase of 7.5%.
Behind the sluggish profits are the dual pressures of costs and competition. On the one hand, the industry’s cost growth rate of 9% exceeded the revenue growth rate of 8.1%, with factors such as fluctuating battery raw material prices and rising labor costs continuing to exert pressure.
External and internal competition
The ‘internal competition’ between new energy vehicles and traditional gasoline-powered vehicles has also intensified, with price wars spreading from the new energy vehicle sector to the gasoline-powered vehicle market, further eroding profits.
For example, this pressure is reflected in Great Wall Motor’s (GWM) financial reports. In the first three quarters, GWM’s revenue increased by nearly 8%, but net profit dropped by almost 17% due to increased investments in distribution channels and fierce price competition.
According to the Chinese news outlet Autohome, more than half of the dealers are losing money, and over 70% of the car models are sold at a loss.
November is a little more rosy
In November alone, the industry’s revenue was 1,144.5 billion yuan (€137.3 billion), a year-on-year increase of 9.7%; costs were 1,016.2 billion yuan (€122 billion), an increase of 11.4%; and profits were 50.8 billion yuan (€6.1 billion), a year-on-year increase of 39.2% (November 2024 being a terrible month).
The automotive industry’s profit margin in November was 4.4%, an improvement compared to 3.9% in October this year and a substantial increase from 3.3% in November of the previous year.
NEVs continue to increase
From January to November 2025, 31.09 million vehicles were produced, a year-on-year increase of 11%.
14.53 million new energy vehicles (NEVs), mostly electric or plug-in hybrid, were produced. This is a year-on-year increase of 27%, with a penetration rate of 47%. Another 16.57 million gasoline-powered vehicles were produced in the same period, remaining unchanged year-on-year. This means that the entire increase in production is accounted for by new energy vehicles.
