For the first time in modern automotive history, China has surpassed Japan as the world’s largest car seller in 2025, reshaping global leadership after more than two decades of Japanese dominance.

How China Reached the Top of the Global Auto Industry

Domestic Market Strength Powered by EVs Nearly 70 percent of China’s vehicle sales are domestic, supported by government incentives, urban EV adoption, and aggressive local pricing. Battery electric vehicles and plug-in hybrids now dominate Chinese showrooms, a trend that contrasts sharply with Japan’s slower electrification pace. In 2025 alone, new energy vehicles accounted for nearly 60 percent of passenger car sales in China.

Export Growth Reshaping Global Markets

Chinese automakers have rapidly expanded exports into Southeast Asia, Europe, the Middle East, Africa, and emerging Asian markets. Brands like BYD and Geely now rank among the world’s top ten automakers by volume, offering feature-rich vehicles at prices often lower than Japanese and Korean competitors.

• China: approx. 27 million vehicles sold in 2025 (+17%)

• Japan: approx. 25 million vehicles sold in 2025 (flat or slight decline)