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Business Insight

Recognizing the growth in China's auto market

Expanding mobility and digital services are offsetting the decline in vehicle sales

Electric car producer NIO expects to eventually generate more revenue from services than vehicle sales.

China is set to record its first annual decline in car sales in decades -- at least, if the downward trend of the last four months continues. Sales in the world’s biggest car market fell 11.7% in October.

The gathering gloom about Chinese car sales, especially among foreign manufacturers, misses a fundamental point, however: growth in automotive services in the country is offsetting the decline in vehicle sales. We estimate that overall Chinese "automobility" revenues will rise this year to $590 billion, up $10 billion from last year. This figure is on track to top $1 trillion by 2025.

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