China's passenger vehicle market has firmly entered the stock era, with the rapid growth phase driven by first-time buyers drawing to a close. McKinsey's comprehensive projections indicate that over the next decade, China's cumulative baseline for organic passenger vehicle sales will hover around 240 million units. Key drivers underpinning this volume include strong repeat-purchase appetite, steady growth in driving licence holders, and rising household purchasing power. However, with the driving licence penetration rate nearing its structural ceiling and parking infrastructure constraints unlikely to ease significantly in the short term, the market will move away from broad-brush expansion into a new normal of "high-volume stability and steady growth".
Over the medium to long term, trade-in replacement demand is emerging as the primary catalyst for overall passenger vehicle market growth. According to a research report by GF Securities, the share of replacement demand is projected to rise from 65% to 71% between 2026 and 2030, sustaining a baseline steady-state domestic demand of around 21 million units. By the end of 2025, the average vehicle age of the passenger car parc had reached 7.5 years, progressively expanding the volume of vehicles entering the replacement window.
The relentless price war is yielding diminishing returns and even triggering a consumer backlash. A McKinsey survey reveals that among car buyers over the past year, those holding a negative view of price wars (22.2%) have outnumbered those with a positive view (16.5%), resulting in a net negative sentiment of 5.7%. Fears of "immediate price cuts post-delivery" have amplified wait-and-see sentiment and lengthened decision-making cycles.
In stark contrast, the net positive sentiment driven by technological iterations and equipment upgrades reached 20.7%, almost doubling from 10.8% last year. Consumers are shifting from merely chasing "cheap deals" to pursuing "genuine value"—with value-driven competition proving nearly seven times more effective than price cuts. The key deciding factor is rapidly pivoting from basic "value-for-money" to "tech-value proposition".
Among the key purchasing criteria for electric vehicles (EVs), "brand" has surged from its longstanding fifth place to second, trailing only "driving range and charging duration". However, the definition of brand equity is being reshaped—it is no longer anchored in historical pedigree, but in "what tangible value it delivers to the user". Consumer interest in specific technological dimensions such as safety, ride and handling, and smart cockpit capabilities (61%) far surpasses historical brand heritage (28%).
Car buyers' brand focus is narrowing; for the first time after years of expansion, the initial brand consideration set has contracted. Brands are effectively becoming "information filters", helping buyers cut through the noise to streamline decisions in an increasingly crowded market.
The rollout of public charging infrastructure is reaching a pivotal turning point. The proportion of BEV owners who find highway charging sufficient for non-peak periods surged from 45% last year to 65%; among PHEV/EREV owners in top-tier cities, 60% are considering going fully electric for their next vehicle. Furthermore, 71% of respondents are optimistic that public charging networks will match the convenience of traditional petrol stations before 2033.
Yet, internal combustion engine (ICE) vehicles are not exiting the scene anytime soon. Approximately 63% of buyers who purchased an ICE vehicle in the past year stated they would still consider petrol or diesel models for their next car. Market demand reflects a complex, multi-tiered transition across varied usage scenarios, underscoring that carmakers cannot afford to bet on a single powertrain route.
Advanced driver-assistance systems (ADAS) and in-car AI assistants have evolved from "good-to-have bonuses" into "entry-level must-haves". A total of 69% of respondents regard Urban NOA (Navigate on Autopilot) as standard equipment when buying a car, while 84% expect in-car AI agents to function as proactive smart assistants. Nearly 90% believe private vehicles will achieve Level 4 autonomous driving before 2035. Buyer expectations for intelligent driving have clearly evolved from a mere spec sheet race to real-world stability and continuous over-the-air evolution.
Consumer preferences are growing increasingly granular. Through user behaviour co-occurrence clustering analysis, Dongchedi has further subdivided the eight primary consumer segments into 25 distinct "mindset tracks"—showing that even within the same demographic, individual priorities can differ vastly. Buying preferences across different brand camps are markedly polarised: joint-venture brand buyers prioritise fuel economy and maintenance costs, emerging EV startup buyers focus on assisted driving and active safety systems, domestic brand buyers show strong interest in hardware such as LiDAR, while luxury brand buyers demand cutting-edge tech experiences and bespoke personalisation.
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