(Yicai) March 10 -- China’s wholesale sales of passenger cars and exports surged to all-time highs in February as the country’s auto market got off to a strong start this year thanks to the government’s generous scrapping and trade-in policies and as car manufacturers continue to hold prices steady.

Wholesale sales of passenger cars soared 33.8 percent last month from the year before to hit a record high of 1.7 million autos, and auto exports surged 11 percent to a record 349,000 units, according to a report released today by the China Passenger Car Association.

Retail sales of passenger cars also did very well, soaring 26 percent to 1.38 million units, the report said. Electric car sales skyrocketed 79.7 percent to 686,000 units, and their market penetration expanded to 49.5 percent from 41.5 percent in January.

Sales of Chinese car brands jumped 51 percent in February year on year to 910,000 units. Chinese auto marques now account for 65.5 percent of market share, up from 54.9 percent a year earlier. German car brands’ market share slumped 4.3 percentage points to 17 percent, that of Japanese brands tumbled 3.7 percentage points to 10.7 percent and that of US marques dipped 1.4 percentage points to 5 percent.

BYD was once again the country’s most popular carmaker, shifting 206,000 units. Geely came second with 180,000 autos and FAW-VW was in third place with 98,000 units. Shenzhen-based BYD’s sales soared 73.2 percent over the period, while that of Geely more than doubled, and FAW-VW’s sales climbed 5.9 percent.

Tesla’s China sales, though, nearly halved last month from the month before to 30,688 units and exports plummeted 86.8 percent.

The decline is probably due to changes in the sales rhythm due to the Model Y’s latest update, said CPCA Secretary-General Cui Dongshu. Chinese consumers choose their vehicles depending on quality, not politics. So Tesla and other US carmakers still have good potential for growth in China, he added.

Japanese carmakers, which have launched several NEVs recently, are known for their strong designs, durability and low operating costs. But the public still needs time to get to know their electric cars, Cui said.

Car sales will continue to log strong growth this month, driven by NEV shipments while sales of fossil fuel-powered vehicles will continue to shrink, the CPCA said.

Price promotions in 2023 boosted the passenger car market by 5.7 percentage points, the highest in recent years, the CPCA said. In 2024, the effect of discounts slowed to 3.2 percentage points, and in the first two months of 2025, there have been even fewer promotions, especially in the gasoline-powered auto market, where prices have remained stable.

Generous Subsidies

Around five million vehicles are expected to be scrapped or upgraded this year through the government’s scrapping program, amounting to around CNY90 billion (USD12.4 billion) worth of subsidies, the CPCA said. And local trade-in policies are expected to help replace 10 million cars, with an estimated CNY130 billion in subsidies.

This year is the last year of tax exemptions for electric car purchases and around 16 million NEVs are expected to be sold, amounting to CNY200 billion (USD27.5 billion) in tax exemptions.

This amounts to around CNY400 billion in subsidies, out of an expected CNY5 trillion of car sales, marking a rare level of support for the auto market.

Editor: Kim Taylor