The 15th Five-Year Plan period represents a crucial stage for China as it strives to achieve the Long-Range Objectives for 2035 and build itself into an automotive powerhouse. From April 11 to 12, the High-Level Forum on Intelligent Electric Vehicle Development (2026) was held under the theme of “Intelligence, Green Development, Integration and Internationalization”. It focused in depth on the global industrial landscape, cutting-edge technologies including AI+automotive and chip computing power. Through cross-sector exchanges, the forum aimed to clarify industrial thinking, build a sound and orderly policy and market system, strengthen global coordination, and enable the steady and long-term high-quality development of China’s new energy vehicles during this critical window.
Wang Qing, Deputy Director of the Market Economy Research Institute
of the Development Research Center of the State Council
At the forum, Wang Qing, Deputy Director of the Market Economy Research Institute of the Development Research Center of the State Council, pointed out that sales data for the first quarter of this year may appear “chaotic” on the surface, but this essentially reflects the combined effect of three forces. First, natural slowdown in overall consumption, where replacement and upgrading demand has become dominant, and such demand is far more sensitive to the macroeconomy than first-time purchases. Second, a “technical correction” to last year’s exceptionally high growth rate. Since sales growth far exceeded the potential growth rate of 3%–4% last year, this year’s downturn is more of a mean reversion in line with objective economic laws. Third, short-term pain following policy adjustments.
In the long run, China’s auto sales have shifted to a new “coordinate system”: a downward trajectory with a flatter slope. This means that explosive growth driven by demographic dividends and popularization dividends is a thing of the past. The market is bidding farewell to “rough growth” and entering a plateau phase that demands greater endurance.
In the future, automobiles will evolve from mere means of transportation into “carriers of emotion and lifestyle”. The essence of marketing is shifting from product competitiveness to “competition of meaning”. Winners in the future will not only sell cars, but also enhance sensory experiences through AI-powered advanced technologies, extend into derivative scenarios such as camping and fishing, and monetize traffic flow.Amid the coexistence of “declining average transaction value” and “upgraded experience”, manufacturers must embed irreproducible cultural elements and transform “hard selling points” into “soft stories” to stimulate immediate decision-making and emotional resonance among consumers in niche, segmented markets.
The following is an edited transcript of the speech:
Today I would like to focus on three topics:First, how should we view the current market situation, given the volatile and seemingly chaotic sales performance in the first quarter?Second, amid the notable market downturn in the first quarter after the strong growth since last year, have the long-term and short-term logics of market growth changed?Third, in line with the forum’s theme, what new trends or directions may emerge in automotive consumption and marketing in the future?
I. How to View the Current Automotive Market Situation
In terms of domestic retail sales, the growth rate of the passenger vehicle market has declined from a high level since the beginning of last year, with a substantial year-on-year contraction in the first quarter of this year. March data showed signs of stabilization and recovery, with the decline narrowing, representing a relatively optimistic trend.
In terms of average daily retail sales (year-on-year figures are often affected by cyclical differences, especially holiday disturbances), February performed better in the first quarter, while the growth rate of average daily sales in March declined. In other words, the February market was not as weak as perceived, and the March market was not as strong as the data suggested. The widely expected strong rebound in March lacked clear data support.
Overall, the year-on-year growth rates of monthly retail sales and average daily retail sales have followed similar downward trends since February last year. In many months, the two lines moved in opposite directions, with monthly sales falling while daily sales rebounded. For objective analysis, both indicators must be considered together.
Nevertheless, much like analyzing stock K-lines, we must examine daily, weekly, and monthly trends. On a quarterly basis, the market has seen a clear and continuous decline since the second quarter of last year. This long-term trend is shaped by three main factors:
Slowdown in overall consumption.The share of replacement and upgrading demand is rising, yet this type of demand is more vulnerable than first-time purchases. For consumers who already own a car, the decision to upgrade is highly sensitive to the macroeconomy, employment, and income expectations, whereas first-time car purchases are relatively rigid.
Overheated growth in 2025.Last year’s domestic sales growth exceeded 9%, significantly higher than the potential growth rate of around 3%–4%. The sharp downturn in the first quarter is partly a natural correction to excessively fast growth. What goes up must come down, and a steeper uphill often leads to a steeper downhill.
Short-term market contraction after policy adjustments.This has been widely analyzed and will not be elaborated on further.
II. Have the Long-Term and Short-Term Logics of Market Growth Changed?
In the long run, the core logic of auto market growth remains unchanged.
The stage of economic development determines overall consumption levels. China is still in the mid-to-low growth range of 200–400 vehicles per 1,000 people. By the end of the 15th Five-Year Plan period in 2030, the potential annual growth rate of domestic sales is expected to be around 2%, and roughly 3%–4% in the recent two years.
The correlation between GDP growth and total retail sales of consumer goods shows a strong positive correlation. As a major consumer good, automobile consumption is ultimately determined by economic growth, which in turn determines the overall consumption level. This is the fundamental logic of the auto market.
Going forward, the market will increasingly feature structural growth. Changes in the development stage are reflected not only in growth rates but also in market structure:
From incremental expansion to stock adjustment. Stock adjustment will play an increasingly important role in driving sales.
From domestic-oriented to domestic and international balanced development. Exports have reached 7 million units and become a major factor influencing total sales.
From fuel-dominated to diversified technology pathways. New energy vehicles remain the main driver of domestic market growth, with their substitution effect still dominant.
In the short run, the growth trajectory has shifted downward.
Similar downward shifts can be seen across consumer sectors: high-end liquor, home appliances, real estate, furniture, automobiles, and even services such as tourism.
Since 2019, China’s auto market growth curve has moved downward and flattened. The number of civilian vehicles per 100 households has exceeded 50, and the ownership per 1,000 people is approximately 256. High growth driven by new penetration is no longer sustainable. The downward shift is mainly driven by macroeconomic conditions and weaker income and employment expectations. A sustained recovery requires a rebound in the macroeconomy, employment, and household incomes.
III. Future Trends in Automotive Consumption and Marketing
Four major trends deserve particular attention, partly driven by technological progress and profound changes in population structure.
1. Growing personalization, niche consumption, and community-based demand
Market segmentation will deepen. Emotional consumption is real and tangible, with rising demand for stress relief, companionship, social interaction, nostalgia, and excitement.Supply must discover and satisfy these needs with diverse products across segmented tracks. Cross-industry traffic convergence will become important: automotive consumers also buy clothing, sports goods, electronics, and participate in tourism, culture, and healthcare. The future market will return to a unified, open model of consumer resource exploration with multiple channels for traffic monetization.
2. Application of advanced technologies and AI-driven experience
Omnichannel marketing has evolved from an offensive strategy to a defensive necessity.To unlock automotive consumption, more attention should be paid to derived demand: understanding why consumers buy cars matters more than whether they will buy. Products should be developed and marketed around self-driving tours, camping, skiing, cycling, fishing, and other lifestyles.
DTC (direct-to-consumer) marketing will become more important, supported by KOLs and KOCs. Brands will expand touchpoints in integrated scenarios such as shopping districts, transportation hubs, and cultural-tourism spaces to stimulate unplanned purchases and impulsive decisions.
3. Popularization of moderate simplicity, green, and healthy consumption
The so-called “consumption downgrade” reflects both short-term expectations and long-term structural trends.Tourism has shifted from large group tours to self-driving trips, reverse tourism, in-depth travel, and experiential travel, leading to lower per capita spending. Meanwhile, consumer acceptance of second-hand goods is rising: the second-hand luxury market grew by 15% last year, significantly outpacing new product sales.
4. Integration of diverse cultural elements
Brands must combine hard product advantages with soft emotional appeal.It is no longer enough to have good products; companies need stories and the ability to tell them well. By embedding culture, enterprises can build irreplaceable competitiveness, deliver experiences, curiosity, and empathy, and effectively stimulate consumer willingness to buy.