China Is Poised to Become the World’s Largest Car Seller

Industry projections suggest China could surpass Japan in global car sales in 2025, driven by EV growth and exports. Read the key trends behind the shift.

China’s automotive industry is approaching a historic milestone. Based on industry projections and data compiled toward the end of 2025, Chinese automakers are expected to finish the year as the world’s largest car sellers, overtaking Japan in total global vehicle sales for the first time.

This is not a marginal shift within individual markets, but a change with global implications. Estimates suggest Chinese manufacturers could sell around 27 million vehicles worldwide in 2025, compared with just under 25 million for Japanese brands. Final figures have yet to be released, but sales data available through November indicate that the gap has continued to widen rather than narrow.

The foundation of this growth remains China’s domestic market. Roughly 70 percent of Chinese automakers’ sales occur at home, where demand is shaped by a distinctly different mix than in most other regions. Nearly 60 percent of passenger car demand consists of battery electric vehicles and plug-in hybrids, reflecting how deeply electrification has taken hold in the country.

Electric vehicles sit at the center of China’s rise. By scaling EV production earlier and faster than many rivals, Chinese manufacturers benefited from lower production costs and a highly integrated supply chain. This has allowed them to offer well-equipped vehicles at prices that international competitors often struggle to match.

At the same time, Chinese brands are no longer confined to entry-level segments. Their portfolios now span everything from simple urban commuters and family SUVs to performance models and ultra-high-power electric cars. This breadth has helped companies such as BYD and Geely break into the global top ten by sales volume, underlining how quickly these brands have evolved.

China’s momentum is increasingly visible beyond its borders. Export growth has accelerated across most major regions. Southeast Asia, long considered a stronghold of Japanese automakers, is expected to absorb around 500,000 Chinese vehicles in 2025. In Europe, sales are projected to approach 2.3 million units despite the introduction of tariffs, while Africa and Latin America are seeing year-on-year growth rates well above 30 percent.

Against this backdrop, the position of long-established industry leaders appears more fragile. Japanese automakers reached their global sales peak around 2018, after which growth flattened. Germany and the United States remain automotive powerhouses, but their trajectories look far less steep when compared with China’s recent expansion.

If current projections hold when final 2025 results are published in early 2026, China will emerge as the world’s top automotive seller for the first time. For decades, global dominance was built on reputations for reliability and mechanical refinement. Today, scale, electrification, and affordability are reshaping the balance of power — and China has positioned itself at the center of that transformation.