China’s 30,000 car dealers face bleak 2025 as price war, e-commerce crimp margins

More than 30,000 car dealers in mainland China are facing another bleak year in 2025, with many turning from profit-generators into corporate failures in two years under a debilitating price war and an e-commerce onslaught.

More than half of the industry’s participants failed to achieve their sales targets for 2024, the China Automobile Dealers Association (CADA) said in an end-December report. Most of them are either suffering huge losses or struggling with a capital crunch, it added.

About 27 per cent of the dealers nationwide attained to less than 70 per cent of their projected sales last year, according to CADA, while some 4,000 dealers, or 10 per cent, have shut down due to a financial squeeze, it added.

“The association expects the auto market outlook to be uncertain in the future,” it said in the report, adding that weak January deliveries are likely given the approaching eight-day Lunar New Year holiday from January 28. “All dealers should rationally assess market demand in their business operations.”

The average price of a pure electric car was reduced by 10 per cent, or 20,000 yuan, while hybrids were discounted by 4.3 per cent, it added. Consumers were able to save 10,500 yuan per unit on average. Nationwide sales rose 4.7 per cent to 20.3 million cars in the first 11 months last year, according to industry data.