A new report by Automotive Data of China (Tianjin) Co., Ltd. in collaboration with the automobile information platform Dongchedi indicates a significant impact of subsidies on consumer behavior in the automotive sector. Over 70 percent of the surveyed consumers expressed that these financial incentives have enhanced their willingness to make purchases.

During the first quarter of 2025, China witnessed impressive figures in passenger car trade-in purchases, totaling 2.79 million units. This marks an increase of over 1 million units compared to the previous year, illustrating the rising trend in trade-in activity that has been bolstered by subsidy programs.

The report further highlights that trade-in replacements have emerged as the preferred category for subsidies, with 2.03 million units recorded in this segment during the same period. This dominant trend underscores the shifting preferences of consumers as they increasingly leverage subsidies to facilitate their vehicle purchases.

In examining consumer preferences, Dongchedi's user research found that subsidies with lower entry barriers are particularly favored. Incentives related to new-car purchases and trade-in options have gained traction among consumers, revealing a clear inclination towards subsidies that simplify the buying process.

As these subsidies become more commonplace, the practice of applying for financial assistance prior to a purchase is becoming standard among consumers. The report notes that more than 50 percent of buyers now depend on offline 4S stores for accurate information regarding available subsidies.

This trend highlights a shift in consumer behavior where financial incentives directly influence purchasing decisions, validating the role of subsidies in promoting vehicle sales in a competitive market. Dealers and manufacturers may need to adapt their strategies to better align with these preferences.

The increasing reliance on subsidies also suggests that consumers are becoming more financially savvy, actively seeking out the best deals available to them. This consumer dynamic may further drive competition in the automobile industry, prompting manufacturers to adjust their offerings and promotional tactics.

Overall, the findings from the report underscore the significant role subsidies play in shaping the landscape of the automotive market in China, creating a ripple effect that influences consumer decisions and dealer strategies across the sector.