Chinese carmakers have continued their strong performance, capturing a larger share of the world's largest automotive market.

According to figures from the China Association of Automobile Manufacturers, sales of Chinese-branded cars in January surged to 1.45 million units, accounting for a remarkable 68 percent of the total passenger vehicle market.

This represents an 8 percentage point increase from the same period of 2024, highlighting the growing dominance of Chinese manufacturers amid intensifying competition.

The strong growth of Chinese brands comes at a time when the domestic automotive sector is undergoing a transformation, driven largely by the popularity of new energy vehicles.

Chen Shihua, deputy secretary-general of the CAAM, said that the performance of Chinese brands had far outpaced the broader market, which saw an increase of 0.8 percent in January year-on-year.

The modest growth was primarily the result of a smaller number of working days in the month because of the Spring Festival holiday and a shopping spree in December when carmakers lavished buyers with discounts and other benefits to push their whole-year sales.

In January, seven out of the 10 bestselling carmakers in the country were Chinese; Geely topped the chart, followed by BYD and Changan.

BYD, China's largest NEV manufacturer, led the charge in the domestic market, reporting more than 296,000 vehicle deliveries in January alone, a 47.5 percent year-on-year increase.

The carmaker's focus on both EVs and hybrid vehicles has made it a formidable competitor in the global car market, where it is increasingly seen as a leader in electric mobility.

Startup Xpeng delivered 30,350 vehicles in January, up 267.9 percent year-on-year.

The figures are in stark contrast with the performance of international carmakers, who have faced more challenges in capturing market share.

GAC Toyota, a Chinese joint venture of Toyota, delivered 15,123 vehicles in January, down 57.14 percent year-on-year.

SAIC Volkswagen, China's first extant automotive joint venture, saw its sales slide to 75,150 units in January, a 20.94 percent fall from the same month of 2024. Dongfeng Peugeot Citroen sold a mere 3,888 units, a 39.4 percent fall.

The rise of Chinese brands is being observed in the premium vehicle sector as well. The M9 SUV from Aito, an NEV brand codeveloped by Huawei and Seres, has been the best-selling model priced above 500,000 yuan ($68,833) in China for 10 months in a row.

Some new outlets of its growing dealership network used to sell premium vehicles from such brands as Audi.

Analysts say the wide variety and cutting-edge features of such vehicles have convinced car buyers that Chinese brands outshine global rivals when it comes to NEVs.

Also, China's push for technological innovation in areas like autonomous driving and battery development has allowed homegrown manufacturers to leapfrog traditional carmakers in key segments.

As foreign brands face pressure to keep pace with China's technological advancements, the dominance of domestic carmakers is likely to grow.

The elimination phase has begun and many car manufacturers are struggling to "beat the count", said analysts from consulting firm McKinsey.

"Those which cannot come up with decent electric vehicles in one or two years, and those which are deep in the red but cannot offer a convincing strategy to go green, will be forced to leave the race," they said.