China Passenger Car Association: From January to March 2025, the automotive industry revenue will exceed 2.4 trillion, growing by 8%, costs will increase by 9%, profits will decline by 6%, and profit margin will be 3.9%, with further decline in profit margin

The Chenglian Branch pointed out that with the strengthening and expansion of the old-for-new policy for consumer goods, diversified consumption scenarios are continuously innovating, driving the benefits of related industries and chain industries to improve. In the first quarter, industrial enterprise profits turned from decline to growth, but the automotive industry still lagged behind. In the first quarter, the profits of industrial enterprises above designated size in the country changed from a year-on-year decline of 3.3% for the entire previous year to an increase of 0.8%, reversing the trend of continuous decline in cumulative profits since the third quarter of last year. In March, the profits of industrial enterprises above designated size changed from a decline of 0.3% from January to March to an increase of 2.6%, indicating an improvement in profits for the month. Driven by the automotive replacement and renewal subsidy policy, from January to March 2025, 7.51 million vehicles were produced, with the automotive industry generating revenue of 2,402.2 billion yuan, a year-on-year increase of 8%; costs were 2,111.9 billion yuan, an increase of 9%; profits were 94.7 billion yuan, a year-on-year decrease of 6%; the profit margin of the automotive industry was 3.9%, which is still lower than the average profit margin of 5.6% for downstream industrial enterprises. Among them, in March, the automotive industry revenue was 921.4 billion yuan, a year-on-year increase of 7%; costs were 814.2 billion yuan, an increase of 9%; profits were 32.7 billion yuan, a year-on-year decrease of 28%; the profit margin of the automotive industry was 3.5%. The automotive industry needs effective cost reduction and efficiency improvement, and to enhance cost control levels. Recently, with the expansion of production scale in the automotive market, PPI has declined, and the cost of upstream lithium carbonate has decreased, putting immense profit pressure on car manufacturers that do not produce batteries. As engines are replaced by batteries, car manufacturers' profits may continue to decline. The central and various levels of government are actively stabilizing fuel vehicle consumption and promoting the strong implementation of scrapping and renewal, expecting "equal rights for oil and electricity" to promote "equal strength for oil and electricity," ensuring that the overall situation of the automotive industry can continue to improve steadily in the future