CNBC AI Exclusive – July 12
An intriguing consumer shift is fueling China’s auto market, according to a senior Chery executive, who posits that consumers are redirecting funds once earmarked for property towards enhancing their lives through vehicle ownership.
Gao Fei, Deputy General Manager of Chery Automobile’s Domestic Business Unit, speaking at the China Auto Forum 2025, observed that current economic headwinds may present an unexpected silver lining for the automotive sector. “Contrary to the broader economic narrative, we’re seeing a behavioral pivot,” Gao stated. “Consumers are signaling that with property purchases on hold, saved capital is accumulating. Investing in a new vehicle represents a tangible upgrade to daily living and mobility quality.”
This redirection of spending underpins Gao’s projection for the Chinese auto market this year, which he forecasts could climb to around 24 million units, potentially exceeding that figure. This translates to a market size roughly equivalent to the entire Western European passenger car market.
The perspective offers a counterpoint to recent commentary from prominent financial writer Wu Xiaobo. Wu famously advised those earning below ¥30,000 monthly (~$4,130 USD) against car ownership. His rationale focused on immediate depreciation, arguing a new car “loses significant value instantly” and burdens owners with ongoing costs like maintenance, parking, and fuel, which together consume substantial disposable income. “Foregoing a car could fund alternative wealth-building avenues like education, property down payments, investment funds, or other appreciating assets,” Wu contended.
This divergence in viewpoints – discretionary life upgrade versus essential cost management – highlights a central tension in evolving Chinese consumption patterns, where big-ticket spending faces heightened scrutiny. Where do you stand? Is a car now the new focal point for aspirational spending? Sound off in the comments.
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