Q2 2025 PRMC Forward Mobility Index<br/>Review & Prospect

Offering investors fresh perspective, seizing short-term volatility, and positioning for long-term growth in the forward mobility sector.

Intelligence Powers New Momentum,
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Global geopolitical uncertainties and fluctuating trade policies continued to cast a shadow in the second quarter of 2025, forcing the automotive industry to seek a new equilibrium amidst complex dynamics. The U.S. auto market showed an overall sluggish performance, as tariffs and policy uncertainties suppressed financing demand for vehicles. This, combined with weak consumer spending on durable goods, put pressure on sales for major automotive brands. Simultaneously, some multinational automakers adjusted their production plans and product rollouts in the U.S., increasing pressure on supply chain restructuring. The European auto market entered a period of structural adjustment, with tariff disputes further slowing the electric vehicle transition for European carmakers. A weak manufacturing sector and low consumer confidence hampered market recovery. In contrast, driven by economic recovery and supportive policies, the Chinese auto market continued its steady growth. Leading domestic brands further consolidated their market-leading positions, and the penetration rate of new energy vehicles (NEVs) continued to rise.

In the second quarter of 2025, China's auto industry maintained stable operation. 2025 H1, auto production and sales reached 15.621 million and 15.633 million units respectively, marking YOY increases of 12.50% and 11.40%. Notably, the sales growth rate accelerated by 0.2 percentage points compared to the first quarter. Auto exports continued their strong growth momentum, with a cumulative total of 3.083 million vehicles exported in the first half of 2025, a year-over-year increase of 10.40%, further expanding the industry's presence in overseas markets.

The PRMC Forward Mobility Index closed at 1,398.76 points in Q2, rebounding by 122.84 points (+9.63%) within the quarter. Its performance trailed the NASDAQ Composite but outperformed other major global indices such as the STOXX Europe 600 Technology, STAR & CHINEXT 50, and Hang Seng Tech. Among the sub-indices, the Forward Mobility Supply Index led the gain (+16.83%), followed by the Forward Mobility Manufacturing Index (+13.19%), while the Forward Mobility Service Index saw a slight retreat (-0.16%).

Individual stock performance showed significant divergence in the second quarter. Companies such as Daimler, Tesla, and Xiaomi Group delivered standout performances, with their stock prices rising by over 20% during the quarter. In contrast, Dongfeng Motor, XPeng Motors, and BAIC BluePark performed poorly, with their stock prices falling by more than 10%.

Those who adapt to change will advance; those who control it will triumph.

Looking ahead to the third quarter, the Chinese auto market is expected to achieve "dual-driver growth" from both domestic and international fronts, powered by its advantages in new energy and supportive government policies. Exports are anticipated to maintain medium-to-high-speed growth, while domestic demand is set to recover, stimulated by multiple policies including "trade-in" programs and "NEVs to the Countryside." However, overseas trade barriers and domestic price wars will remain major challenges.

The European and U.S. markets both face systemic challenges at the macroeconomic level. The European auto market is constrained by sluggish demand due to economic slowdown and a weak manufacturing sector. The ongoing negotiations between China and the EU regarding NEV import tariffs, and regulatory compliance will be a key variable affecting the market landscape.

The direction of tariff policy of the United States remains highly uncertain. The resulting policy expectations are disrupting corporate decision-making and supply chain stability. Compounded by the fact that previous vehicle demand has been largely met, the overall market is expected to continue operating at a low level.