All eyes on March after sales decline

Car sales declined in February as the record-long Spring Festival holiday reduced the number of working days. However, with pent-up consumer demand and new car launches in March, the car market is expected to rebound.

The leading automakers SAIC,Geely and BYD sold 269,500,206,200 and 190,200 vehicles, respectively. All experienced declines both year-on-year and month-on-month, except for Geely, which saw a slight year-on-year increase of 0.6 percent.

This was supported by its new energy vehicle brands Lynk & Co and Zeekr, which sold 27,000 vehicles (a 59 percent year-on-year increase) and 24,000 vehicles (a 70 percent year-on-year growth), respectively.

Chery sold 160,800 vehicles in February while Changan Automobile sold 151,922 vehicles, marking a 12.8 percent increase from January but a 5.89 percent decrease year-on-year.

Exports were a highlight for those automakers in February. Geely's exports surged by 138 percent year-on-year. BYD's overseas sales surpassed its domestic sales for the first time, with a year-on-year growth of 41.4 percent. Chery has exported over 100,000 vehicles monthly for 10 consecutive months.

Among NEV startups, four exceeded 20,000 units in February: Leapmotor with 28,100 units; Li Auto with 26,400 units; Nio with 20,800 units and Xiaomi with over 20,000 units, all showing a month-on-month decline but an increase compared with the same month of 2025.

XPeng did not surpass the 20,000 vehicle mark, delivering only 15,256 vehicles, a year-on-year decrease of 49.9 percent and a month-on-month decline of 23.8 percent.

Industry experts point out that in times of market fluctuations, only companies with a balanced product lineup and flexible market strategies can maintain a firm footing. Those that fail to keep up with market changes face a long-term risk of losing market share.

The China Automobile Dealers Association noted significant pressure on February car retail sales due to the nine-day Spring Festival holiday reducing working days and store traffic. Factors such as pre-holiday inventory clearance, changes in new energy vehicle tax policies and expectations for spring auto show discounts increased consumer hesitancy. As a result, 76.8 percent of dealers said sales fell short of expectations.

Facing the market downturn in February, automakers have prepared for a recovery in March, focusing on the launch of new models and discount policies. More than 30 new vehicle models have been or are set to be launched in the month.

Within the first week of March, several automakers introduced new models. BAIC's Arcfox brand began pre-sales for the Alpha S5 sedan on March 1, starting at 112,800 yuan ($16,370). Available in six versions, it offers both electric and range-extended options, with an official launch expected in mid to late March.

XPeng launched the new pure electric version of the X9 MPV with five variants, priced starting from 309,800 yuan on March 2.

GAC Hyptec launched the A800, a mid-to-large flagship sedan with a range-extended powertrain, on March 4.

BYD followed on March 5 with the launch of the Datang, its Dynasty lineup's first D-segment flagship SUV. The new model features a 1,000-volt high-voltage architecture, targeting the premium market with a price around 400,000 yuan.

Meanwhile, many automakers have introduced limited-time purchase policies, offering benefits such as cash discounts, trade-in subsidies and financial incentives, which apply to both NEVs and fuel-powered cars.

Brands such as Leapmotor, Aito and Nio have introduced car purchase benefits that include financial subsidies and free advanced driver-assistance system privileges.

At the national level, the subsidy program continues in 2026, offering up to 20,000 yuan for scrapping old cars for NEVs and up to 15,000 yuan for trade-ins, which can be combined with local and automaker incentives. Local governments are allowed to provide subsidies up to 15,000 yuan per car, with special benefits for rural buyers and small businesses.

In February, provinces including Hunan, Qinghai, Henan, Fujian and Jiangxi introduced detailed policies to support car trade-in programs.

According to Cui Dongshu, secretary-general of the China Passenger Car Association, regulating pricing practices can alleviate consumer hesitation. As local subsidy application processes become clearer and new products attract interest, consumer willingness to purchase cars is expected to return.

The China Automobile Dealers Association anticipates that in March, there might be an increase in showroom traffic and sales in the car market. However, the overall pace of market recovery is expected to be relatively moderate.