China's Auto Industry Hits Record Low Profit Margins; Experts Attribute It to Strategic Investment, Not Sector Decline

In 2025, China's automotive industry is experiencing expanding scale but declining profitability amid its accelerated push toward electrification, intelligentization, new-energy adoption, and internationalization, with overall profit margins falling to their lowest level in a decade. Experts note that this profit decline does not signal industry deterioration; rather, it reflects companies’ strategic decision to channel substantial funds into R&D, focusing on core technologies such as intelligent chassis and autonomous driving algorithms to build long-term assets for the future. Meanwhile, Chinese automakers are collectively “going global,” accelerating their worldwide expansion and profoundly reshaping the competitive landscape of the global automotive industry.