Rising Oil Prices and Post-Holiday Slump Pressure ICE Vehicle Market; EVs Await Recovery

Cui Dongshu, Secretary-General of the China Passenger Car Association (CPCA), noted that the internal combustion engine (ICE) vehicle market is under significant pressure due to factors such as rising oil prices, increased raw material costs, and higher chip prices. March, traditionally a slow season following the Lunar New Year holiday, was further dampened by a "late cold snap" effect, resulting in relatively low sales during the first week. Overall performance remained stable but subdued. Although terminal transaction prices have stayed steady, they have not met consumer expectations, placing evident pressure on dealerships. However, signs of recovery emerged in the second week. Meanwhile, the new energy vehicle (NEV) market is also in a temporary trough, awaiting new model launches and greater clarity in the external environment. Cui added that with more working days before the 2026 Lunar New Year, February exports and production will benefit, and the overall auto market this year is gradually regaining momentum.