China Unveils Plan to Stabilize Auto Industry Growth

China’s state news agency Xinhua reported that a new multi-ministry plan for 2025 and 2026 emphasizes cost control, price oversight, and the promotion of innovation and domestic demand. The plan, jointly announced by eight government ministries, aims to steer the nation’s automotive industry through a challenging period while supporting sustainable growth.

The projections indicate that total vehicle sales this year are expected to drop to around 32.3 million units, representing a modest growth of 3 percent. According to the China Association of Automobile Manufacturers, this is in line with the 4.5 percent growth registered in 2024. Beijing has invested heavily in recent years to support the development of China’s electric vehicle sector.

Published on Saturday, the plan forecasts a 20 percent increase in new energy vehicle (NEV) sales for 2025, reaching 15.5 million units. However, fierce price competition—driven by companies flooding the domestic market with low-cost vehicles and trade-in incentives—has forced many startups into bankruptcy.

In a July meeting, Chinese officials called for an end to irrational competition and urged a focus on healthier, sustainable development. China’s export market has also faced setbacks, impacted by the European Union’s 2023 investigations into unfair competition in the country’s automotive sector.

Adding to tensions, AFP reported that Mexico proposed this week to raise tariffs on Chinese vehicle imports from the planned 15-20 percent to a staggering 50 percent—sparking anger in Beijing.