In recent years, there has been a trend of downgrading in the consumption of automobiles in China. According to data from the first five months of this year, the sales of vehicles priced below 100,000 RMB have increased by 51%. At the same time, the average selling price of passenger cars has decreased from 178,000 RMB in 2023 to the current 161,000 RMB. Analysts in the industry attribute this surge in demand for low-end passenger cars to increased economic pressure, reduction in subsidy policies, and the immaturity of new energy vehicle technologies.
On June 14th, Xu Changming, a senior economist at the National Information Center of the CPC, stated at the 2025 Xuanyuan Automobile Blue Book Forum that the demand for passenger cars within different price segments in the domestic market has shown two distinct phases: a continuous upgrading trend in passenger car consumption before 2023, followed by a trend of downgrading since 2024.
From 2018 to 2023, the average selling price of passenger cars in the domestic market steadily climbed from 150,000 RMB to 178,000 RMB, before declining to 169,000 RMB in 2024 and further dropping to 161,000 RMB in the first five months of 2025. It is projected that the average selling price of passenger cars for the full year of 2025 will fall below 160,000 RMB.
The shift towards “downgraded” automobile consumption is also evident in the varying sales of vehicles in different price brackets. The sales of cars priced above 300,000 RMB saw negative growth in 2024 and the first five months of this year, with their market share decreasing from 15.1% in 2023 to 10.8% in the first five months of this year. On the other hand, the sales of vehicles below 100,000 RMB saw a 51% growth in the first five months of this year, with their market share increasing from 18.1% in 2023 to 27.2% in the first five months of this year.
In February, the Wuling Hongguang MINIEV four-door version was officially launched with a price range of 44,800 to 50,800 RMB. In April, the monthly sales volume of the Hongguang MINIEV family reached 28,990 units, maintaining its position as the best-selling A00-class new energy vehicle for 57 consecutive months, earning it the title of the “King of Commuter Cars.”
Renowned automotive blogger “Kayle_zhao” analyzed that the evolution of the automotive market, as the second largest consumer product after real estate, often foreshadows broader economic trends. The rise of vehicles priced below 100,000 RMB reflects the dual pressures of decreasing household income expectations and increasing precautionary savings. When families begin cutting back on major consumption budgets, it often signifies a wavering confidence in the future. If the job market and household incomes do not significantly improve, the proportion of vehicles priced below 100,000 RMB may continue to rise to over 30%.
Automotive blogger “Sanlang_slang” summarized the five reasons behind the popularity of low-end cars.
In recent years, the economic growth rate has slowed down, with many experiencing slower income growth or stagnation. Meanwhile, essential expenses such as housing, education, and healthcare have continued to rise. Purchasing a car has quietly slipped down the priority list in household budgets.
More heart-wrenching is the increasing prevalence of debt among young people. Those born after 1990 or 2000, after just a few years of work, face pressures of buying a house, getting married, and raising children. A house easily costs over a million, draining savings, and monthly mortgage payments can overwhelm salaries.
As an example, the white-collar worker Xiao Zhang in Shenzhen, with an annual salary of 300,000 RMB, purchased a Wuling Hongguang MINI EV priced at 60,000 RMB.
Xiao Zhang mentioned that the company has a subway station nearby, making it convenient for weekend outings by renting a car. Spending 200,000 RMB on a car seems unnecessary when that money could be saved for travel expenses. This shift in mindset directly impacts traditional automotive companies.
Since 2024, policies have begun to tighten: subsidies for new energy vehicles have been significantly reduced, increasing the cost of vehicles by tens of thousands of RMB; cities like Beijing, Shanghai, Guangzhou, and Shenzhen continue to restrict license plate issuance, making it as challenging as winning the lottery; some cities have even mandated restrictions on hybrid vehicles.
For example, in Shanghai, the previously popular plug-in hybrid electric vehicles (PHEV) saw a drastic drop in sales as they were included in the license plate restriction policy. On the other hand, pure electric vehicles priced below 100,000 RMB have become highly sought after due to their tax exemptions and lack of license plate restrictions.
The number of ride-hailing drivers in China has exceeded 20 million, with car-sharing platforms covering over 300 cities. Moreover, the car rental industry has seen intensifying competition: a certain platform launched a promotion offering monthly BMW rentals for 199 RMB, further impacting the sales of luxury cars.
The shortcomings of high-end new energy vehicles are becoming increasingly apparent. Range anxiety, with battery life dropping up to 30% when using air conditioning in winter, leads to owners constantly searching for charging stations. Charging queues are common at highway service areas during holidays, causing frustration for owners. High depreciation rates have been observed, with owners of cars purchased last year experiencing a drop of 100,000 RMB in the resale value this year, leaving them in distress. In comparison, pure electric vehicles priced below 100,000 RMB have proven to be more practical.
The article points out that as economic growth slows down, the debt-to-income ratio of young people soars, and modes of transportation diversify, the act of buying a car naturally transitions from impulsive consumption to rational choice.
One internet user, “Tiangao_yundan_fengqing_xinjing,” expressed that when there’s no money in your pocket, having a tool for shelter and transportation is sufficient. Why purchase an expensive car when it doesn’t fly, and in ten or twenty years, it will just be scrap metal? Whether it’s a million or a ten-thousand RMB car, they will have the same scrap value in the end.