Auto Industry Profit Margin Hits Five-Year Low in 2025 Amid Rising Costs and Structural Weaknesses

[Market Data] In 2025, the auto industry's sales profit margin dropped to 4.1%, marking a five-year low.

Key Metrics: Slight Annual Profit Growth Amid Persistent Margin Pressure

In 2025, the auto industry generated RMB 461 billion in profits, up just 0.6% year-over-year; total revenue reached RMB 11,179.6 billion, with costs amounting to RMB 9,849.8 billion. Cost growth (8.1%) outpaced revenue growth (7.1%). The sales profit margin stood at 4.1%, significantly below the downstream industrial enterprises' average of 5.9%.

Strategic Fundamentals: Rising Costs and Structural Weaknesses Intensify Profitability Challenges

Cui Dongshu noted that automakers’ general lack of in-house battery production, rising upstream lithium carbonate costs, and increasing Producer Price Index (PPI) are the primary drivers of profit pressure. In December alone, industry profits plunged 57.4% year-over-year to RMB 20.7 billion, with the profit margin falling to 1.8%, a sharp decline both month-over-month and year-over-year. Despite a 10% year-over-year increase in production and sales volume, the sector remains trapped in a “volume without profit” dilemma.