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1、Insights on Small Town Car Market(2025)TengYi Research InstituteCapital Inflow&Population Backflow Revitalize the Small Town Car MarketAuthorsDirector/Chief ALijun ZhouIndustry AYing GaoIndustry ABenya ShiOver the past two decades or so,Chinas small town passenger vehicle market experienced dramatic

2、 fluctuations.Between 2007 and 2017,tier 3-5 cities witnessed rapid growth,with annual end-user sales surging from under 2 million units to nearly 12 million,and corresponding market share rising from below 40%to close to 50%,catapulting the small town car market into a new mainstream segment compar

3、able to its big city counterpart.This surge provided fertile ground for domestic brands such as Geely,Great Wall Motor,Chery,Changan and BYD,while also creating new growth frontiers for international players including VW,Toyota,Honda,Nissan,Buick and Hyundai.In response,carmakers across the board in

4、tensified their“market penetration”strategies in lower-tier cities;however,beginning in 2018,the small town car market underwent a sharp reversal.End-user sales dropped swiftly below 10 million units and eventually dipped under 8.5 million,as market share quickly reverted back to just over 40%.Durin

5、g this downturn,brands heavily reliant on the small town car market suffered significant setbacks many saw their sales halved or worse,with some nearly vanishing from the market altogether.The once-aggressive“go-downstream”strategy of carmakers was effectively stalled;then,20232024 marked a strong r

6、ebound:end-user sales approached the 10-million-unit threshold once again,and as of Q1 2025,its market share recovered to 44.66%;The sudden resurgence of the small town car market carries significant strategic implications for most carmakers.In Q1 2025,between 55%and 65%of total vehicle sales for Ge

7、ely,Wuling,Chery,Changan,Nissan,Haval and JETOUR came from small towns.For BYD,VW and Honda,small towns contributed approximately 50%of their total sales.The outcome of the“small town battle”in 20252026 will be a key determinant in the ongoing race for market leadership between Geely and BYD.While l

8、uxury and emerging brands such as Mercedes-Benz,Audi,BMW,Tesla,Li Auto,XPeng,and Xiaomi currently derive a smaller proportion of their sales from small towns,they are all actively seeking to deepen market penetration in lower-tier regions.As such,none can afford to overlook the strategic opportuniti

9、es presented by this new wave of small town market growth;The unexpected resurgence of the small town car market is set to disrupt the established strategies of many carmakers.Between 2017 and 2022,in response to the broader trend of urbanization in Chinas car market,leading carmakers such as BYD,Ge

10、ely,Chery,Great Wall Motor and Changan decisively launched“high-end”strategies.These initiatives were often prioritized at the highest levels of corpo-rate planning.As a result,the upgrading of compact models previously well-suited to the small town car market was significantly delayed or even halte

11、d.This strategic shift has left many companies underpre-pared to capitalize on the renewed growth in lower-tier cities;At the heart of the matter lies a fundamental question:is the recent resurgence of the small town car market a coincidence or an inevitability?Is it a short-term rebound or the begi

12、nning of a long-term structural shift?The small town car market gained momentum in 20232024:its rising market share signals strategic relevance for leading auto-makers,especially mainstream carmakers like Geely and BYDBased on Yicai classification,small town refers to tier 3,4 and 5 cities,big city

13、refers to tier 1,new tier 1 and tier 2 citiesEnd-User Sales and Market Share of Small TownPV Market 2007-Q1 2025(10,000 units)Top 20 Brands in Q1 2025 China PV MarketEnd-User Sales by City TierEnd-User SalesMarket Share0%10%20%30%40%50%60%0200400600800100012001400200720082009201020112012201320142015

14、2016201720182019202020212022202320242025Q10%10%20%30%40%50%60%70%80%90%100%BYDVWGeelyToyotaWulingCheryChanganHondaMercedesAudiBMWTeslaNissanLi AutoXpengBuickHavalHongqiJETOURXiaomiTier2NEW Tier1Tier1Tier5Tier4Tier3Primary driver:various short-term government stimulusmeasures in 20222025 disproportio

15、nately boosted the price-sensitive small town marketThe recent surge in the small town car market can be directly attributed to a series of short-term stimulus policies intensively introduced by various levels of government between 2022 and 2025.In early 2022,as signs of market weakness emerged,the

16、State Council issued the Opinions on Further Unleashing Consumption Potential and Promoting Sustained Consumption Recovery on April 25,explicitly calling for the stabilization and expansion of major consumption categories,including cars.This led to a wave of local vehicle purchase subsidies.On May 2

17、3,the State Council further decided at an executive meeting to implement a phased reduction of RMB60 billion in vehicle purchase taxes for certain passenger vehicles,which immediately boosted sales from 1.32 million units in May to 1.93 million in June.On September 26,the Ministry of Finance,the Sta

18、te Taxation Administration and the Ministry of Industry and Information Technology jointly announced an extension of the NEV purchase tax exemption through to 2023,providing reassurance to the year-end market.In 2023,the focus shifted further to new energy vehicles:on June 15,five ministries jointly

19、 launched the 2023 NEV-to-the-Countryside campaign to stimulate rural demand,and on July 19,tax exemptions for NEV purchases were extended through the end of 2027,further enhancing the policy environment for NEVs.That year,Chinas passenger vehicle sales rose sharply,with NEV penetration surpassing 3

20、0%,contributing significantly to volume stability.In 2024,stimulus policies were further intensified.On April 24,the Ministry of Commerce(MOFCOM)and six other departments issued detailed subsidy rules for vehicle replacement:consumers scrapping China 3 or older emission standard gasoline vehicles or

21、 NEVs registered before April 30,2018 toward the purchase of NEVs were eligible for RMB10,000 in subsidies;for new gasoline vehicles under 2.0L,the subsidy was RMB7,000.On August 16,these amounts were raised to RMB20,000 and RMB15,000,respectively.As a result,passenger vehicle sales exceeded 23.5 mi

22、llion units in 2024,up nearly 9%year-on-year.In early 2025,eight ministries including MOFCOM released a new notice continuing the replacement incentive program,further relaxing scrappage and eligibility criteria.Additional stimulus measures are currently under discussion;Given the lower household in

23、come levels in small towns compared to major urban centers,consumers in these markets tend to be more price-sensitive.In 2024,the average annual income of car-buying households in tier 1 cities was RMB282,600,while in tier 5 cities it was only RMB160,000.As a result,price ranked only third among the

24、 top concerns for prospective car buyers in large cities but stood as the number one factor for buyers in smaller towns.Against this backdrop,it is unsurprising that the series of subsidy policies introduced between 2022 and 2024 had a significantly stronger stimulative effect on the small town car

25、market;While recent growth in the small town car market has been driven in part by stimulus policies,it is essential to assess whether there are other underlying drivers especially long-term structural factors behind this resurgence.Without such sustainable forces,the market risks a sharp reversal o

26、nce the policy incentives are phased out,potentially leaving the small town car market in disarray.Source:TYRISource:Public infoSmall Town Car MarketShare 2017-Q1 2025Average HouseholdDisposable Income ofCar Buying Familiesby City Tier 2024(RMB10K)Top 10 PurchaseFactors ofProspective CarBuyers in Bi

27、gCities 2024Top 10 Purchase Factors of Prospective Car Buyers in SmallTowns 202436%38%40%42%44%46%48%50%201720182019202020212022202320242025Q12022202320242025State Council issues Opinions on Further Unleashing Consumption Potential and Promoting Sustained Consumption Recovery,calling for the stabili

28、zation and expansion of major consumption categories including cars;State Council decides on phased reduction of RMB60 billion in vehicle purchase taxes for certain passenger vehicles,purchase tax halved for passenger vehicles below RMB300K and 2.0L;Ministry of Finance and other departments jointly

29、announce extension of NEV purchase tax exemption through to 2023MIIT and other departments jointly launch 2023 NEV-to-the-Countryside campaign;Ministry of Finance and other departments issue notice extending NEV purchase tax exemption through to end of 2027;MIIT and other departments issue working m

30、easures to ensure stable growth of auto industry(2023-2024);MOFCOM and other departments issue Three-Year Action Plan for County Business(2023-2025)supporting NEVs and accelerating build out of rural charging infrastructureApril:MOFCOM and six other departments issue detailed subsidy rules for vehic

31、le replacement,offering RMB10,000 for NEVs and RMB7,000 for gasoline vehicles;August:MOFCOM and seven other departments increase subsidies to RMB20,000 and RMB15,000,respectivelyEight ministries including MOFCOM release new notice continuing the replacement incentive program,further relaxing scrappa

32、ge and eligibility criteriaNew policies could be forthcoming051015202530Tier 1New Tier 1Tier 2Tier 3Tier 4Tier 50%50%100%0%50%100%BrandSafetyPriceQualityComfortReputationEnergy ConsumptionStylingFeatureServicePriceSafetyBrandReputationQualityEnergyConsumptionSpaceComfortFeatureRange Short-term stimu

33、lus offers immediate impact but lackssustainability,the revival of small town car market depends oncontinued investment and improvement in land/resource,capital,labor,technology and institutional frameworkBetween 2022 and 2024,while successive rounds of subsidy policies had an immediate and visible

34、impact on the car market especially in small towns they also introduced a growing risk of“policy dependency,”akin to a drug addiction.By the end of 2024,policymakers faced a dilemma:whether to continue offering scrappage and replacement subsidies.Discontinuation risked a sharp market contrac-tion in

35、 2025,while continuation implied a heavy fiscal burden.In early 2025,after much deliberation,authorities opted to extend the subsidies.As a result,end-user sales in the passenger vehicle market exceeded 5 million units in Q1,maintaining overall market stability.Looking ahead to 2026,the govern-ment

36、may once again be forced to confront an even more difficult policy decision;The resurgence of the small town car market cannot rely on stimulus policies alone:it fundamentally depends on improvements in the broader economic environment.Sustained investment and advance-ment in foundational factors la

37、nd and natural resources,capital,labor,technology,and institutional mechanism are critical.Only through the enhancement of these core elements can the small town car market achieve stable and healthy long-term growth.Key EconomicDevelopmentFactorsLand/ResourceCapitalLaborTechnologyMechanismOthersCap

38、ital outflow and youth migration once undermined thesmall town car market is a reversal underway?In the 1990s,Chinas market-oriented reforms entered a new phase of acceleration,particularly benefiting the eastern coastal regions,where private and individually owned businesses flourished.This period

39、saw the emergence of a new wave of privately funded logistics companies including SF Express,STO Express,YTO Express,Yunda,and ZTO Express driven by grassroots capital.At the turn of the century,Chinas broader opening-up efforts especially its accession to the WTO attracted substantial international

40、 investment,leading to the rise of early e-commerce platforms such as Dangdang,Joyo,and eBay China.These developments were heavily concentrated in tier 1 cities such as Beijing,Shanghai,Guangzhou and Shenzhen,where the convergence of new capital and modern logistics infrastructure laid the foundatio

41、n for the countrys emerging internet economy.During this phase,labor outflows from smaller cities remained focused on traditional manufacturing,with the migrant workforce primarily composed of middle-aged male workers;The SARS outbreak in 2003,combined with a new wave of international capital inflow

42、s,gave rise to a new generation of e-commerce platforms such as Taobao and JD,followed closely by emerging competitors including Amazon China,Paipai,and VIPshop.This period also witnessed the introduction of innovative marketing campaigns most notably the“Double 11”shopping festival on Taobao as wel

43、l as the rapid expansion of new players such as Ele.me,Meituan,Yongche and Qunar into emerging verticals like food delivery,ride-hailing and travel services.Together,these forces accelerated the expansion of Chinas internet economy beyond tier 1 cities,penetrating provincial capitals and econom-ical

44、ly strong tier-2 and 3 cities.As a result,a new labor force began to emerge:the so-called“internet migrant workers,”marking a shift in the labor export model from small cities.The labor migration pattern evolved into a dual structure,increasingly characterized by the participation of both younger an

45、d middle-aged workers;Starting in 2012,the rapid proliferation of mobile internet in China ushered in a new wave of international capital inflows,driving the digital economy into a period of explosive growth.Fierce competition broke out across numerous verticals including ride-hailing,food delivery,

46、logistics,travel and live streaming led by major internet ecosystems such as Alibaba,Tencent,Baidu,and ByteDance,all backed by significant capital investment.The emergence of the“Internet Plus”concept marked a turning point,accelerating the digital integration of traditional industries.During this p

47、eriod,internet firms operated like high-powered pumps,extracting vast numbers of young and able-bodied workers from small cities and towns.The labor export model of these regions fully transitioned to one dominated by younger demo-graphics.By 20182019,the rise of new business models such as communit

48、y-based e-commerce and on-demand delivery intensified this competition,with internet companies aggressively competing for young talent from small cities.This mass outflow of“small town youth”directly contributed to the sharp halt in growth momentum in the small town car market starting in 2018;The t

49、hree-year pandemic from 2020 to 2022 brought a sudden halt to Chinas economic momentum and prompted both capital and enterprises to seriously reconsider their investment strategies and structural positioning.Since any transformation or optimization of a business model ultimately manifests through sh

50、ifts in labor flows,the unexpected rebound of the small town car market between 2022 and 2024 raises an important question:are small town youth beginning to return?Evolution of Big 4 Capital,Technology and Labor IntensiveIndustries:E-Commerce,Logistics,Food Delivery and MobilitySmall Town Car Market

51、 End-User Sales by Age Group 2014-2024(10,000 units)Source:TYRISource:Public InfoIncubationGrowthClimaxAdjustment20122003LogisticsE-CommerceFood DeliveryMobilitySF STOYunda YTO ZTODangdangJoyoebayTaobaoJDAmazonPaipai VIPshopEle.meMeituanTaobao Double 11 YongcheTmallDiDi TaxiKuadiDiDiChuxingUberMeitu

52、anAmapCaoCaoT3JD to HomePinduduoHema FreshCainiao DadaJDMeituan Flash BuyDouyin e-CommerceTaobao 1-HRJD 1-HRJ&TJD TakeoutDouyinTakeoutDiDi TakeoutPrimarilyBig City2020Didi DeliveryHuaxiaozhuSmall Town ElderlySmall Town Middle-AgedSmall Town Youth0 200 400 600 800 1000 1200 1400 201420152016201720182

53、01920202021202220232024Post-pandemic capital flows drove e-commerce,tourism and live streaming to rural markets,drawing youth back homeThe sudden outbreak of COVID-19 in 2020 brought Chinas economy to an immediate standstill and severely impacted the urban internet economy.Leading e-commerce platfor

54、ms such as Alibaba and JD.com scrambled to identify new growth drivers,naturally turning their attention to small town and rural markets.Both companies subsequently launched targeted rural initiatives such as Alibabas“Hot Soil”Plan and JD.coms“Prosperity Plan”to facilitate agricultural product trans

55、actions and support rural revitalization.In 2021,the central governments formal rollout of the“common prosperi-ty”policy further strengthened the resolve of private capital and enterprises to expand into lower-tier markets;if the SARS outbreak in 2003 propelled the rise of Alibaba and JD.com,the COV

56、ID-19 pandemic(20202022)catalyzed the emergence of short video platforms like Douyin and Kuaishou.A surge of grassroots,rural-themed short video content covering topics such as travel,food,home renovation,fish farming,fishing,horseshoeing,carrying timber,tofu making,cooking,animal breeding,sand unlo

57、ading and veterinary work helped these platforms tap into a new blue ocean of traffic,while also enabling rapid monetization through e-commerce,community commerce and other new business models.Logistics players such as SF Express and JD Logistics quickly aligned with this trend,advancing“last-mile-t

58、o-village”delivery projects and fully supporting the rural penetration strategies of social capital and enterprises;Following the end of the pandemic,significant capital investments across major sectors including e-commerce,tourism,short dramas,live streaming and logistics accelerated their push int

59、o rural markets,inevitably bringing with them a flow of labor,particularly young and middle-aged workers equipped with digital and internet-savvy mindsets.For example,a self-media team operating a channel themed“Returning to the Village After a Failed Startup to Renovate Old Houses”typically begins

60、with three to four members handling performance,filming,editing,scriptwriting and operations.Once the channel gains real traffic and commercial monetization potential,the team must expand beyond its content functions to build a business division,tackling commercial negotiations,livestream e-commerce

61、,advertising integration,offline events and more.At that stage,roles such as planning,sales,and procurement become essential,and the team can easily grow to a size of 1020 people.To ensure smooth operations,such self-media ventures generally require several members to be permanently stationed in rur

62、al areas;Since the rise of Li Ziqi,thousands of“Li Ziqi-style”creators have become active in Chinas rural landscapes.Most of them come from major cities,dedicating their youth to expanding agricultural product sales channels and contributing to the revitalization of rural economies.（Li Ziqis model i

63、s a form of content-driven personal IP commercialization,grounded in cultural storytelling and rural aesthetics,which contrasts sharply with the celebrity-and-hype-driven Kardashian model.)Source:Public infoCapital Flows Actively Responded to Call for CommonProsperity and Accelerated Flow Downstream

64、 Starting in 2020IncubationGrowthClimaxAdjustment20122003LogisticsE-CommerceFood DeliveryMobilityTravelShort-FormVideoSF STO Yunda YTO ZTO TFeizhuWeChat VideoTongchengQunarTuniuMeituan Travel MafengwoKuaishouDouyin DangDangJoyoebayTaobaoJD.comAmazonPaipai VIPshopele.meMeituanTaobao Double 11YongcheT

65、mallDiDi TaxiKuaidiMeituan AmapCaoCaoT3JD to HomePinduoduoHema FreshCainiao Dada JD LogisticsDiDiChuxingUberMeituanFlash BuyAlibaba”Hot Soil“PlanJD.com“Prosperity Plan”Douyin Life ServicesT“Vacation Farm Project”Meituan hotel&travel expand tolower-tier marketsDouyin,Kuaishou&WeChat Video expand rura

66、l-themed contentSF Last Mile to VillageDouyin e-commercetTaobao 1-HRJD 1-HRJ&TJDTakeoutDouyin TakeoutDidiTakeoutBoost CommonProsperityAccelerateDownstream PushPrimarilyBig City2020Common ProsperityDidi DeliveryHuaxiaozhuIn May 2021,Alibaba launched its“Hot Soil Initiative,”introducing a comprehensiv

67、e program to support rural revitalization through three key pillars:technology,industry,and talent.The initiative outlined 14 specific measures,setting concrete operational goals for the companys rural revitalization efforts over the following year.In September 2023,Douyin Life Services（a local life

68、style and business platform offering deals on dining,travel,etc.)announced the rollout of its“Regional Service Provider”model across 100 lower-tier cities already covered by the platform.By adopting a“one city,one strategy”operational approach,Douyin aims to attract and collaborate with high-quality

69、 regional service providers to better serve the needs of local small and medium-sized businesses,thereby driving new business models and consumption trends within these urban markets.In 2014,SF Express launched its“Courier-to-Village”initiative.By 2024,the program had established over 100,000 villag

70、e-level service cooperation points,effectively achieving universal courier coverage across rural areas.The initiative has expanded the agricultural product distribution and service network to more than 2,800 county-and district-level cities nationwide,thereby enhancing regional economic development

71、and advancing agricultural modernization.In October 2020,JD.com launched its“Prosperity Initiative”as part of its rural revitalization strategy.The program focuses on five key areas:accelerating the development of local agricultural specialty industries through brand building;enhancing agricultural

72、product circulation through infrastructure expansion;promoting the digitized and intelligent transformation of the entire industrial chain by extending deeper into the production side;advancing modern rural governance through digital empowerment;and strengthening rural capacity-building by investing

73、 in talent development.In April 2021,Tencent introduced its“Sustainable Social Value Innovation”strategy,committing an initial investment of RMB50 billion.In August,the company further allocated an additional RMB50 billion to launch its“Common Prosperity Special Initiative,”aiming to provide sustain

74、ed support across key public welfare areas,including rural revitalization,income growth for low-income populations,enhancement of grassroots healthcare systems and the promotion of equitable educational development.In 2021,T Group launched its“T Vacation Farm”project aimed at promoting rural revital

75、ization by developing an integrated rural tourism ecosystem anchored by high-end boutique lodgings.The initiative seeks to establish a model for leveraging tourism to drive rural development.As of December 2024,a total of 34 vacation farms have been established under the program.Following the pandem

76、ic,Meituans hotel and travel business increasingly focused on lower-tier markets,with hotel room nights in these cities growing 45%year-on-year in 2023.Additionally,Meituan concentrated on expanding its“next-day delivery”fresh produce supply chain,covering over 2,000 counties nationwide.Through its“

77、direct-from-farm”sourcing model,the company has shortened supply chain links and reduced fresh produce loss rates to below 3%.Content/TrafficLivestream/SellingLogistics/MobilityTrade/TravelSocial Media/ReputationRedefineDownstreamEcosystemIn recent years,capital flows have been accompanied by“return

78、ingto the countryside:”more entrepreneurs born in the 1960s and 1970sbrought capital and technology home for retirement and new venturesBorn in years when Chinas annual birth population reached 2530 million,the post-60s are not only the countrys largest demographic group since the founding of the Pe

79、oples Republic but also one with a deep-rooted attachment to the countryside.Whether they worked as laborers,became entrepreneurs or rose through government ranks,most originated from rural backgrounds.As of 2025,individuals born in the 1960s are between the ages of 56 and 65 years old,making them t

80、he main retirement cohort and potentially sparking a widespread“returning home after retirement”trend.Alongside them,the 1970s generation currently aged 46 to 54 also shares a strong rural connection and is increasingly tempted by this trend.The robust growth of the internet economy in major cities,

81、combined with the ongoing contraction of the manufacturing and real estate sectors,is progressively narrowing opportunities for this group.Although still theoretically young,many in the 1970s generation may choose to return home,where some are likely to embark on entrepreneurial ventures,further boo

82、sting the local small-town economy;At present,Chinas migrant worker population remains massive and is showing signs of aging.In 2024,the total number of migrant workers still stood at 300 million,with nearly 180 million working away from home;notably,the proportion aged over 50 has risen to 31.60%.T

83、hese figures indirectly suggest that the scale of the“returning home”trend among the 1960s and 1970s generations could be significant;As the post-60s and post-70s generations return to their hometowns,the capital,technology and experi-ence they painstakingly accumulated in major cities will also flo

84、w back to small towns,becoming some of the most valuable resources driving local development;Theoretically,the“returning home after retirement”trend among portions of the post-60s and post-70s generations could continue for at least a decade.Following them,members of the post-80s generation many of

85、whom also maintain a connection to their rural roots may begin to embark on the same path.Even if this“returning home”cycle spans only the next 20 years,it is a trend significant enough to warrant close attention from carmakers and related industries.Chinese Population Birth,Public Admin&Social Orga

86、nizationEmployment and End-User Sales 1949-2024(10,000 people/10,000 units)China Local&Mobile MigrantWorker Count 2020-2024(10,000 people)China Migrant WorkerAge Distribution2020-2024Local Migrant WorkerMobile Migrant Worker50&Above41-5031-4016-2021-30Source:National Bureau of Statistics050010001500

87、200025003000350019491952195519581961196419671970197319761979198219851988199119941997200020032006200920122015201820212024Post-60sPost-70sPost-80sBirths Public Admin&Social Organization Employment0500010000150002000025000300003500020202021202220232024202020212022202320240%10%20%30%40%50%60%70%80%90%10

88、0%The combined impact of capital-driven youth return and retirement-led homecoming is already evident in the small town car marketTheoretically,the ongoing capital flow into lower-tier markets is drawing some young people back to their hometowns for work and entrepreneurship,while the large-scale re

89、tirement of the post-60s and post-70s generations is driving a parallel wave of older individuals returning home.Both trends are favorable for stimulating small town economies and,by extension,the small town car market.In practice,early signs of this shift have already emerged:since 2022,the proport

90、ion of elderly consumers in the small town car market has accelerated,reaching 6.37%,and by 2024,nearing 10%.Meanwhile,the share of young consumers has shown signs of stabilizing around 30%in 2024.As both elderly and youth shares have increased,the small town car markets share of the national market

91、 has also started to rebound,climbing to 44.66%in Q1 2025;The trend of young people returning home carries significant uncertainty,as many may eventually reverse course and return to urban centers.In contrast,the return of elderly retirees tends to be more decisive and permanent once they go back,th

92、ey tend to stay.Even if they are frequently asked,with a smile,“where are you from?”they simply take it in stride.Compared to the youth segment,the elderly car market holds even greater potential to become the next blue ocean for the small town car market.Small Town Car MarketEnd-User Sales by Age G

93、roup2014-2024Small TownCar Market Share2017-Q1 2025Source:TYRIYouth:34 years old&below;Middle-aged:between 35&54;Elderly:55 years old&aboveCapitalInflowPopulationBackflowSmall Town EconomySmall TownCar MarketElderlyMiddle-AgedYouth0%10%20%30%40%50%60%70%80%90%100%201420162018202020222024201520172019

94、2021202336%38%40%42%44%46%48%50%201720182019202020212022202320242025Q1Middle-aged consumers,rather than elderly or young ones,remain thecore of the small town car market:only by seizing opportunities amongmiddle-aged men and women can carmakers secure their footholdIn the past 3-4 years,although the

95、 number of elderly car buyers in small towns has continued to rise,the market size as of 2024 remained relatively modest at only 1 million units,indicating that it still requires long-term development.As for the youth segment,its long-term growth foundation is not solid,given the simultaneous trends

96、 of outmigration and return migration among young people even those who return home may leave again.Over the next decade,the primary battleground of the small town car market will remain among middle-aged consumers.In 2020,end-user sales in the middle-aged segment rose to 4.3 million units,surpassin

97、g the youth segment to become the largest market in small towns.This upward trajectory continued,reaching nearly 5 million units in 2024 double the size of the youth market and far ahead of the elderly segment;The current wave of middle-aged consumers dominating the small town car market largely con

98、sists of the same individuals who led the youth market in the previous cycle simply put,the people remain the same,but time has moved on.Todays potbellied small town boomers are not only upgrading their own cars but also purchasing vehicles for their wives.By 2024,the gender ratio in the middle-aged

99、 small town car market stood at roughly 60:40,representing a relatively balanced split.Carmakers must ensure that their latest wave of market penetration strategies address both male and female consumers,marking a significant shift from the previous round of strategies,which were heavily focused on

100、small town youth;As of early 2025,many carmakers remain fixated on the bygone era when small town youth dominated the market,with few having developed targeted strategies for middle-aged consumers particularly middle-aged women.A decade from now,todays middle-aged consumers will have largely transit

101、ioned into the elderly segment,signaling that the small town car market will likely fully enter its“elderly era.”At that point,carmakers will once again need to rapidly optimize their product portfolios and strategic plans.Given the fast-paced consumption cycles characteristic of the small town car

102、market,carmakers must avoid clinging to outdated strategies and instead proactively prepare for the next consumption cycle.Small Town Car Market End-User Sales by Age Group2014-2024(10,000 units)End-User Sales of Small Town Middle-AgedCar Market by Gender 2024Source:TYRIYouth:34 years old&below;Midd

103、le-aged:between 35&54;Elderly:55 years old&aboveYouthMiddle-AgedElderly010020030040050060070080090020142015201620172018201920202021202220232024Small TownMiddle-Aged Male59.58%Small TownMiddle-Aged Female40.42%From 2023 to 2024,the middle-aged-dominated small town car marketgave rise to numerous new

104、hit models,disrupting the traditionaldominance of the Lavida,Sylphy and Haval H6,with BYD emergingas the biggest beneficiaryWith the continued rise of the middle-aged segment,the product landscape of the small town car market underwent major changes between 2017 and 2024.Models that were once popula

105、r among young small town buyers such as the Lavida,Sylphy and Haval H6 saw their combined market share decline sharply from 63.52%to just over 41%,a drop of more than 20 percentage points.By 2024,the Haval H6 had fallen out of the small town markets top 20 in sales,while the Sylphy and Lavida ranked

106、 only third and fifth,respectively.The sales focus has steadily shifted toward mainstream quality and grand&high-end models better suited to middle-aged families,with the formers market share rising from 15.96%to 20.92%and the latters from 3.13%to 8.20%.Models like the BYD Song family,Geely Xingyue

107、L,Chery Tiggo 8 series,VW Magotan and Passat all aligned with small town consumers appetite for upgraded offerings achieved rapid sales growth and a strong rebound.Meanwhile,small&cute and refined&stylish models also gained share,rising to about 6%and over 10%,respectively,driven by strong commuting

108、 demand among small town women,turning models like the BYD Seagull,Wuling Hongguang MINIEV,and BYD Yuan PLUS into new blockbuster hits.Market share for stream-lined&sporty models increased from 2.88%to 6.29%,and for off-road&macho models from 1.39%to 4.14%.As the population of middle-aged women and

109、retired returnees continues to grow,the diversifi-cation trend in the small town car market is expected to become even more pronounced,further expanding the growth potential for personalized segments like sporty and off-road vehicles;Starting in 2020,as the small town car market accelerated its tran

110、sition toward more advanced,energy-efficient and commuter-oriented products,its structural transformation intensified.By 2024,14 out of the top 20 best-selling models in the small town car market were new releases launched in or after 2020.Notably,the BYD Seagull,Qin PLUS,and Wuling Hongguang MINIEV

111、 secured the top three spots.Among these top 20,five were small electric vehicles,six were hybrid models and three were midsize cars,all better aligned with middle-aged consumers evolving demands for commuting,energy efficien-cy,and product upgrades;In 2024,BYD emerged as the biggest beneficiary in

112、the small town car market,with seven models represented among the top 20 best-sellers.Looking ahead to 2025,a new wave of products including the Nissan N7 and Xingyao 8 will further sharpen competitive dynamics by amplifying product attributes such as energy efficiency and upgrade potential,intensif

113、ying the battle for market share in the small town car market.End-User Sales of Top Selling Models in SmallTown Car Market 2017-2024(10,000 units)Share of End-User Sales in Small TownCar Market by Product Attribute 2017-2024Source:TYRI05101520253020172018201920202021202220232024SeagullQin PLUS NEVHo

114、ngguang MINIEVSylphySong PLUS NEVLavidaWuling BingoYuan PLUSSagitarSong Pro NEVPassatQin LDestroyer 05FrontlanderChangan LUMINXingyue LHonda CR-VMagotanChangan CS75 PLUSCorolla Cross201720182019202020212022202320240%10%20%30%40%50%60%70%Premium BusinessNoble&LuxuryGrand&High-EndMainstream QualityEco

115、nomy BlandSturdy&CommercialAvant GardeOff-Road&MachoStreamlined&SportyRefined&StylishSmall&CuteRetro&ClassicIn 2025,leveraging new opportunities in the small town car market,Geely(Galaxy)is aggressively building a new blockbuster product portfolio and poised to challenge BYDs leadershipThe rapid ris

116、e of the small town car market theoretically presents opportunities that should benefit all players;however,in practice,it has manifested more as a survival-of-the-fittest scenario.Between 2020 and Q1 2025,many major brands including VW,Toyota,Changan,Honda,Nissan,Haval and Buick saw their small tow

117、n car market share either continuously shrink or suddenly contract.Mid-sized and smaller brands such as JETTA,Beijing Auto,Kia,Bestune,Roewe and MG,which rely heavily on small town sales despite having modest overall volumes,have faced increasingly challenging survival conditions.Only a handful of b

118、rands BYD,Geely,Wuling,Chery,and JETOUR have meaningfully capitalized on the new opportunities emerging in the small town car market;In 2023,BYD leveraged a lineup of energy-efficient models such as the Qin PLUS,Song PLUS and Song Pro to boost its small town car market share sharply to 11.14%,surpas

119、sing VWs 10.82%and establishing itself as the new market leader.BYDs momentum continued into 2024,with its market share soaring to 16.43%,and seven of its models ranked among the top 20 best-sellers in small towns.VW,by contrast,saw its share fall below 10%,effectively being outpaced by BYD.By the e

120、nd of 2024,a new strong contender emerged:Geely Auto.With fresh products such as the Xingyuan,E5,and Starship 7,combined with a strong focus on price-to-value ratios,Geelys small town car market share surged in Q1 2025 to nearly 10%,matching VW and causing BYDs share to drop sharply to 13.70%.Lookin

121、g ahead to the second half of 2025,Geely has a lineup of upcoming models designed to meet the upgrade demands of middle-aged small town consumers.In contrast,BYDs arsenal of new competi-tive offerings is relatively limited.Geelys current approach built on a unified platform and a strong emphasis on

122、price-to-value aligns well with small town consumer preferences and effectively targets the weaknesses in BYDs dual Dynasty and Ocean series strategy.If BYDs upcoming models like the Xia and Tang L fail to optimize pricing and scale production in time,and if Geelys economy-orient-ed large vehicles s

123、uch as the Xingyao 8 and Galaxy M9 quickly gain traction,BYD will find itself in a highly passive position.Should Geely surpass BYD in small town sales by the end of 2025,it would directly threaten BYDs leadership position in Chinas domestic car market;Because most carmakers have been slow to align

124、their strategies with the evolving trends of product upgrading,energy efficiency and commuter-focused demands in the small town car market,the current wave of opportunities is likely to be captured by only a select few brands.This dynamic will accelerate the survival-of-the-fittest reshuffling withi

125、n Chinas automotive landscape.Market Share of Mainstream Brands inSmall Town Car Market 2020-Q1 20250%2%4%6%8%10%12%14%16%18%20202021202220232025Q12024BYDVWGeelyWulingToyotaChanganCheryHondaNissanHavalJETOURAudiBMWMercedesBuickHongqiTrumpchiLeapMotorLYNK&COGAC AIONTop 20 Mainstream Brandsin Small To

126、wn Car MarketPenetration Q1 2025Small Town CarMarket Share2017-Q1 202565.77%65.27%64.54%62.53%62.50%62.30%62.22%60.40%60.08%57.32%56.94%55.49%51.10%50.81%50.59%49.10%48.43%47.68%47.30%45.89%0%20%40%60%80%36%38%40%42%44%46%48%50%201720182019202020212022202320242025Q1JETTAWulingJETOURChanganCheryBeiji

127、ngKiaBestuneHavalNissanRoeweGeelyTrumpchiVWEXEEDBYDHondaTANKMGDeepalMainstream carmakers should strengthen their“economy strategy”whileadvancing their“high-end strategy”to build a new balanced strategicsystem that simultaneously captures both big city and small town marketsBetween 2023 and 2024,the

128、rapid rise of the small town car market was accompanied by a notable increase in its overall market share.The most immediate driver behind this resurgence was the series of short-term subsidy policies introduced intensively by various levels of government between 2022 and 2025,which disproportionate

129、ly stimulated small town markets due to their higher price sensitivity.However,the sustainability of this growth depends on the continued investment and improvement in fundamental elements such as land,resources,capital,labor,technology and institutional frameworks.Over the past decade,the decline o

130、f the small town car market was largely driven by the rapid capitalization of major cities,which attracted large numbers of small town youth and caused small town markets to shrink sharply.In the post-pandemic period,massive capital inflows into sectors like e-commerce,tourism,live streaming and sho

131、rt-form video aligned with Chinas“common prosperity”policy accelerated the urban-to-rural shift,drawing some young people back to their hometowns.Simultaneously,a wave of“returning home after retirement”has emerged,with increasing numbers of individuals born in the 1960s and 1970s bringing capital a

132、nd expertise back to rural areas for retirement and entrepreneurship.These combined trends youth for a modern city,return driven by capital flows and retirement-driven homecoming have already shown early impacts in the small town car market.While the sales shares of elderly and youth segments have i

133、ncreased,the core of the market remains dominated by middle-aged consumers,and the value potential of the small town car market continues to rise;Over the past decade,as the small town car market remained in decline,growth in the domestic car market was largely driven by big cities.Carmakers such as

134、 BYD,Geely,Great Wall Motor,Changan and Chery all launched“high-end strategies,”introducing a slew of high-end brands such as Denza,Yang Wang,Fang Cheng Bao,ZEEKR,LYNK&CO,TANK and AVATR many priced above RMB200,000.Meanwhile,brands like NIO,Li Auto,Xiaomi and the Huawei-backed ecosystem positioned t

135、hemselves directly as premium players focused on major urban markets.In contrast,many formerly dominant,economically balanced models that had catered to the traditional purchasing power of small town youth saw their product pipelines stagnate,leaving only a handful of brands able to benefit when the

136、 small town car market suddenly rebounded;In 20232024,the middle-aged-driven small town car market gave rise to numerous new blockbuster models,quickly upending the traditional dominance of vehicles like the Lavida,Sylphy and Haval H6.These new blockbuster products were concentrated among a small nu

137、mber of brands.In 2024,BYD alone accounted for seven models in the top 20 best-sellers in small towns,establishing a powerful“economy matrix”and overtaking VW to become the new market leader.In 2025,Geely(Galaxy),aggressively aligning itself with the small town car markets evolving trends of product

138、 upgrading,energy efficiency and commuter needs,is also working hard to build a new portfolio of economy-oriented blockbusters,positioning itself to challenge BYDs leadership in Chinas domestic car market;At its core,the mission of Chinas“common prosperity”initiative lies in advancing both small tow

139、n economies,essential to the countrys national rejuvenation,and big-city economies.For carmakers seeking to seize this historic opportunity tied to national rejuvenation and common prosperity,it is imperative to balance a“high-end strategy”with an“economy strategy,”building a new,well-rounded strate

140、gic system that simultaneously captures both big city and small town car markets.As for policymakers,their role extends beyond helping carmak-ers unlock the consumption potential of small towns:they must also work to break consumption bottlenecks in major cities.For example,in Beijing,after a lifeti

141、me of hard work and saving millions,a retiree eager to respond to government calls to boost domestic demand might dream of buying a large off-road vehicle for long-distance travel only to find they lack the“qualification”to purchase a car at all.This is nothing short of a disgrace!Brand Portfolio of

142、 Select Mainstream Carmakers8W20W50WBYDGeelyGWMChanganCheryYang WangFangChengBaoDenzaBYD(Dynasty+Ocean)Geely(Galaxy)ZEEKRLYNK&COHavalORAWEYTANKChangan(Qiyuan)DeepalAVATRCheryicarEXEEDFulwinSTERRANIOHuaweiHigh-End StrategyAITOSTELATOShangjieMAEXTROfireflyONVONIOLUXEEDJETOURShanhaiZonghengEnd-User Sal

143、es byVehicle Attribute Big City vs.Small Town 2024Share of End-User SalesBig City vs.Small Town2017-Q1 20250%5%10%15%20%25%30%35%40%45%Small TownBig CityBig City Car MarketSmall Town Car Market0%10%20%30%40%50%60%70%80%90%100%201720182019202020212022202320242025Q1Premium&BusinessNoble&LuxuryGrand&Hi

144、gh-EndMainstream QualityEconomy BlandSturdy&CommercialAvant GardeOff-Road&MachoStreamlined&SportyRefined&StylishSmall&CuteClassic&RetroSource:TYRIThis report is produced by TengYi Research Institute.All text,pictures andtables are protected by relevant trademark and copyright laws.Some textand data

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146、n advance and citesource.No quotations of modifications or abridgements of the originalcontent are permitted.Copyright DisclaimerCurrently TYRI does not publish reports for commercial purposes,we mainly helpempower customers like OEMs and dealers;TYRI prides itself on its rich data and the ability t

147、o speak the facts based on these data;Everyone has different views,therefore we welcome comments and feedback onour own views.Lets agree to disagree.TYRI positioning:non-commercial digital car market think tankTYRI mission:help Yiche customers better understand Chinascar marketCommunications(Media,e

148、tc.)Extract（Survey/Consulting/Association/Investment Banking）Target Audience（OEM/Dealer/Investment）Traffic,Leads,Conversion,TransactionAd,Membership,Collection,ActivityReceive Basic InformationGain Core PerspectivesReport,Advisory,Suggestion,Diagnostics,SystemInfo,etc.ServiceFeeGain Trust&CustomersS

149、hare Knowledge&OpportunitiesShareKnowledge&OpportunitiesGain Trust&CustomersGain Trust&CustomersShareKnowledge&OpportunitiesNew Species(non-commercial digital think tank)Pro:WideAudienceCon:Limitedin DepthNature:TrafficConversionEffect:BoostSalesPro:Complementary;Con:Cooperation LimitedNature:Commun

150、ication of Views;Effect:Elevate InfluenceThe media&thepressarestrengtheningdataanalysisandindustry authority,as well as elevatingcooperation withOEMs.Caseinpoint:TengYiforming TYRI.Entities likeconsulting firmsarestrengtheningdata miningcapabilities andindustryauthority,andimprovingindustrycredibili

151、ty andcustomerinfluence,likethe McKinseyQuarterlyValue：Guidancefor the massmedia:realize long-term interaction;Cooperationforcommercial extraction:facilitate long-termcollaboration;Trust for customers:build long-termcooperationTraits:CommunicationsConsciousness,ExtractionCapability,Audience BaseAuto

152、 Industry Dialogue Tour Insights Clear as Blazing FireCore Topic:Unpacking the Wealth Ledger ofCar Buying FamiliesTime:May-July 2025Target:primarily TengYi customers includingOEMs&dealers,one on one discussionSignup on WeChat:yicheresearch(please provide name,position,companyand cell phone#)-a New B

153、ook from TengYi Research Institutes Industry Analysis Series focuses on the topic of“car buying desire”and gives a deeper look into the evolution of selling points such as smart driving,brand,price,energy consumption,power,styling,space and off-road,to help carmakers avoid blindly following trends,a

154、nd effectively extract own core selling points.How to get your book:OEMs,dealers and Yiche customers shouldcontact their Yiche service personnelNon-Yiche customers please contact TYRIdirectly(WeChat:yicheresearch)From May to July 2025,TYRI will kick off its 10 round of“Insights Clear as Blazing Fire

155、”Auto Industry Trends&Analysis Dialogue Tour,covering the core topic of“unpacking the wealth ledger of car buying families”to help carmakers better understand user consumption power and characteristics.thDemystifying Chinas Auto MarketDemystifying Chinas Auto Market(2025 Edition,Part I)Contact UsFollow UsWeChatJuns Market TalkBenya Shi，Industry AnalystMobile：188 0118 7009Mail：WeChat：yicheresearch