Overproduction in China: Pressure on Europe is increasing

China continues to shake up the global automotive industry. According to the latest figures of the China Association of Automobile Manufacturers (CAAM: China automobile manufacturers association) published by the company Inovev, the country will produce more than 30 million passenger cars in 2025.

A record level confirming the Central Kingdom’s central role in the world automobile industry. But behind these figures lies a more nuanced reality. While Chinese factories are working at full capacity, the domestic market is starting to slow down.

Because according to the China Passenger Car Association (CPCA), 23.26 million passenger vehicles were sold in China in 2025, compared to 23.37 million in 2024; this figure is a decrease of 0.5%, the corresponding figures for vehicles produced in China and imports “can be estimated at 700,000 vehicles in 2024 and 400,000 vehicles in 2025”, notes Inovev. While Chinese manufacturers will produce 30.27 million cars by 2024, an increase of more than 10%.

30 million cars were produced

At the same time, global deliveries, i.e. vehicles sold in China and exported, such as the Dacia Spring, increased by 9.2% to exceed 30 million units. It’s strong progress, showing that the expansion of Chinese brands is accelerating. In short: Chinese factories are producing more and more… while domestic demand is stagnating. “Therefore, while some of this additional production is for export, some of it goes to storage,” underlines Inovev.

©Inovev

At the same time, China shipped more than six million cars worldwide, an increase of almost 22% in one year. In other words, one in every five Chinese cars produced in 2025 left the country.

This situation shows the current difficulties of the Chinese market. After years of explosive growth, competition among local builders has become fierce. Promotions and price discounts, especially for electric cars, are increasing and causing a real price war. To continue growing, Chinese brands no longer have a choice: They must now conquer the rest of the world.

Chery is number one in exports

This increase in power is being driven by a handful of manufacturers. Currently, Chinese exports are largely dominated by four groups: Chery with over 1.3 million vehicles, BYD with 1 million units, SAIC Motor with 900,000 vehicles and Geely with approximately 600,000 vehicles. These four manufacturers alone represent almost two-thirds of Chinese auto exports, with Europe becoming the primary destination.

©Inovev

In 2025 alone, Chinese automakers held 6% of the European market for passenger cars (EU + UK + Switzerland + Norway), not counting the Volvo brand, a Swedish subsidiary of the Chinese group Geely. Market shares in the Old Continent increased from 0.3% in 2020 to 6% in 2025.

12% to 15% market share in Europe by 2030

Chinese manufacturers further increased their market share in Europe in 2026, reaching 8.3% as of the end of March. The Inovev company estimates that the 10% limit will probably be reached or even exceeded in 2027 or 2028.

“A forecast for 2030 suggests that Chinese manufacturers could represent 12% to 15% of the market (11.5% for trucks),” says Inovev. During this period, Chinese manufacturers will probably have made large investments in industrial facilities in Europe.

©Inovev