2024 China Gasoline Vehicle Market Research
Market Overview and Sales Analysis
Market Size and Sales Decline Trend
In 2024, China’s gasoline vehicle market experienced a significant decline in both sales and market share due to the ongoing substitution effect of new energy vehicles (NEVs). According to data from the China Passenger Car Association (CPCA), retail sales of conventional fuel vehicles from January to November reached 10.663 million units, a year-on-year decrease of 15%. During the same period, NEV retail sales reached 9.594 million units, a year-on-year increase of 41.2%, reducing the market share of fuel vehicles to 52.6%. It is estimated that annual retail sales of fuel vehicles will decline by approximately 15%, highlighting the market’s contraction pressure.
Price Wars and Intensified Market Competition
Fuel vehicle manufacturers adopted significant price reduction strategies to counter market share losses. From January to November 2024, the average price reduction for fuel vehicles reached 9.3%, involving 71 models. Some B-segment vehicles (e.g., Buick LaCrosse, Nissan Teana) saw prices drop to the 150,000 yuan range, while luxury brands like BMW and Mercedes-Benz offered discounts exceeding 100,000 yuan to attract consumers. Despite these efforts, fuel vehicle sales struggled to compete with the growth momentum of NEVs, leading to an “inward-rolling” market competition.
Regional Consumption Differences
Gasoline vehicle consumption exhibited a pattern of “stronger in the east and south, weaker in the west and north.” The eastern and southern regions accounted for 53% of national consumption, with Guangdong, Zhejiang, and Jiangsu being the largest consumer provinces. In contrast, central and western regions experienced slower growth in gasoline consumption due to lower economic development and vehicle ownership rates.
Core Drivers of Market Development
Policy Support and Trade-In Subsidies
In 2024, the government introduced a trade-in policy, offering subsidies of up to 13,000 yuan for scrapping old vehicles and purchasing new fuel vehicles. Combined with automaker promotions, this policy stimulated over 1.3 trillion yuan in automotive consumption for the year. While the policy provided short-term demand boosts for fuel vehicles, it remains insufficient to reverse the long-term trend of NEV substitution.
Intelligent Transformation of Fuel Vehicles
To remain competitive, fuel vehicles accelerated their intelligent upgrades. For example, the MG7 2025 model featured the 8155 chip and AR-HUD, while brands like SAIC Volkswagen promoted strategies for “the smartest fuel vehicles,” enhancing product appeal through technological advancements.
Supply Chain and Cost Control
Refining companies optimized production capacity through a “reduce oil, increase chemicals” strategy, improving gasoline quality (e.g., China VI standards). However, cost pressures continued to rise. In 2024, the automotive industry’s profits fell by 8%, forcing fuel vehicle manufacturers to balance technological R&D and cost control.
Development Trends and Challenges
Short-Term Trends: Continued Price Wars and Market Fragmentation
Deepening Price Competition:The fuel vehicle price reduction trend is expected to continue. After the 2025 policy subsidy phase-out, companies will need to maintain survival through cost reduction and efficiency improvements.
Pressure on the Premium Market: Luxury brands (e.g., BMW, Porsche) face dealer network withdrawal crises, declining brand premium capabilities, and market share erosion by high-end NEV models.
Long-Term Trends:Technological Upgrades and Substitution Pressure
Accelerated Electrification Substitution:In 2024, NEV penetration exceeded 50%, and the market share of fuel vehicles may further shrink to below 50% by 2025.
Environmental and Policy Constraints: China VI emission standards and carbon neutrality goals drive gasoline quality upgrades, but rising environmental costs compress profit margins.
Internationalization and Supply Chain Adjustments
Export Market Growth: In 2024, fuel vehicle exports reached 4.4 million units, a year-on-year increase of 26%, becoming a key growth driver. However, trade barriers such as EU tariff hikes pose challenges.
Collaborative Supply Chain Transformation:The automotive supply chain is shifting toward green and intelligent solutions. Traditional fuel vehicle manufacturers must collaborate with the NEV industrial chain to enhance global competitiveness.
Market Challenges and Recommendations
Key Challenges are coming from two aspects:
Irreversible NEV Substitution:The maturity of NEV technology and cost reductions continue to squeeze the fuel vehicle market.
Tightening Policy Environment:Stricter environmental regulations impose higher emission and energy consumption standards on fuel vehicles.
Shifting Consumer Preferences: Younger consumers increasingly favor NEVs, requiring fuel vehicle brands to reposition themselves in the market.
Development Recommendations
Technological Upgrades:Increase R&D in hybrid technologies (e.g., 48V mild hybrid systems) to improve fuel efficiency.
Differentiated Competition:Focus on niche markets (e.g., commercial vehicles, remote areas) to leverage the range and infrastructure advantages of fuel vehicles.
Policy Coordination: Advocate for “equal treatment of fuel and electric vehicles” to reduce discriminatory policies like driving and purchase restrictions, stabilizing market expectations.
2024 marked a turning point for China’s gasoline vehicle market, with sales declines and price wars highlighting the industry’s transformation pressure. In the short term, policy subsidies and intelligent upgrades may slow market contraction, but long-term strategies must address the challenges of NEV substitution through technological innovation and global expansion. Moving forward, fuel vehicle manufacturers must identify new growth opportunities through cost control, technological iteration, and ecosystem collaboration to adapt to a diversified market landscape characterized by the coexistence of fuel and electric vehicles.