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11
2026
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06
China's Auto Industry M&A Hits Nearly 168.7 Billion Yuan in 2025, Intelligent Driving Becomes Capital Hotspot
PwC China recently released its 2025 Review and Outlook on M&A Activities in China’s Automotive Industry. The report shows that China’s automotive M&A market registered steady growth and structural optimization last year. A total of 402 deals were completed with a combined transaction value of 168.7 billion yuan, roughly on par with the figure for 2024. Although the number of deals dropped by 24%, the average transaction size rose markedly, indicating that capital is increasingly flowing to high-quality leading enterprises.
Technologically driven sectors stood out as the highlight of the 2025 M&A landscape. Intelligent auto components took the lead, accounting for 21% of total transaction value, followed by the new energy vehicle sector at 17%. The two segments together made up nearly 40% of all M&A volume. Notably, CATL, a leading power battery maker, secured 18.741 billion yuan in strategic financing in May 2025, the largest single deal of the year. Investors included Sinopec (Hong Kong) and Kuwait Investment Authority. This single transaction accounted for 11% of the annual total, proving the strong appeal of core component enterprises to capital.
Financial investors dominated the market, backing deals worth 90.6 billion yuan and taking a 55% share of total value. Industrial capital, by contrast, focused on industrial chain integration, with frequent investments in new energy commercial vehicles and autonomous driving solutions. Geographically, the Yangtze River Delta and Guangdong-Hong Kong-Macao Greater Bay Area emerged as core M&A hubs, contributing over 51% of the national transaction volume thanks to mature industrial clusters. While cross-border deals remained limited in number, their average scale kept expanding, reflecting the rising global appeal of China’s automotive industry.
Auto parts led all sub-sectors, logging 313 deals worth 112.4 billion yuan, a year-on-year increase of 6.1%, driven by the industry’s shift toward electrification and intelligence. The complete vehicle manufacturing sector saw divergent performance, with total M&A value falling 23% year on year. Even so, autonomous commercial vehicles maintained investor enthusiasm for three consecutive years. Neolix secured 4.257 billion yuan in Series D financing from UAE-based Al Raed Capital, marking a landmark investment in intelligent commercial vehicles. Boosted by favorable policies, the automotive aftermarket posted a 36% year-on-year surge in transaction value, with used car circulation and vehicle recycling emerging as new investment focuses.
PwC analysts pointed out that the automotive M&A sector has shifted from extensive expansion to targeted investment. Capital now favors enterprises with solid technological barriers, scale advantages and viable profit models, as the industry enters a phase of stock consolidation and reshuffling. Looking ahead to 2026, M&A activities are expected to stay robust in intelligent components, autonomous driving systems and connected car platforms. Cross-border cooperation and technology-driven consolidation will likely become major trends.
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