China’s car sales declined 12% YoY in January, marking the first drop since September and the largest in nearly a year, as automakers prepared for heightened competition in the world’s largest auto market. The decline was partly attributed to the Chinese New Year’s timing shift and frontloaded demand from late 2024, driven by automakers meeting annual targets and consumers capitalizing on expiring government subsidies. New energy vehicle (NEV) sales, including electric vehicles and plug-in hybrids, grew 10.5% annually, accounting for 41.2% of total sales but failing to outsell gasoline cars for the second consecutive month. The Chinese New Year typically boosts rural car purchases, favoring gasoline vehicles. NEV sales are projected to rise to 57% of total sales in 2025, up from 47% in 2024.