*

Car sales +26.1% in Feb vs -12% in Jan

*

EV, PHEV sales dwarfed by gasolines for third straight

month

*

Automakers scramble under BYD-led smart EV price war

(Adds details and context, paragraphs 4-16, adds charts)

BEIJING, March 10 (Reuters) - China's car sales inched

up 1.3% in the first two months of 2025 from the same period a

year earlier, as an expanded customer subsidy programme spurred

auto demand while a new smart electric vehicle price war

unfolds.

Passenger vehicle sales rose 26.1% year-on-year to 1.41

million units in February, following a 12% fall in January, data

from the China Passenger Car Association (CPCA) showed on

Monday.

The timing of the Lunar New Year celebrations, the country's

largest annual holiday, which fell in late January compared with

February last year, disrupted production and consumption

activities.

The consumer goods trade-in scheme has covered over 1

million vehicles so far this year, Commerce Minister Wang Wentao

said last week on the sidelines of the annual parliamentary

session.

The subsidised auto trade-ins topped 6.8 million

vehicles last year, with over 60% of participants opting to

trade old cars for EVs and plug-in hybrids, known collectively

as new energy vehicles.

EV and plug-in hybrid sales grew 79.7% to make up 48.8%

of overall car sales last month, failing to outsell gasoline

cars for the third consecutive month.

Elevating a three-year-old price war in the world's

largest auto market to a new level, BYD

equipped its best-selling Ocean and Dynasty lineup with advanced

driving-assistance systems without extra charge in February.

The move prompted rivals including Geely and

Stellantis ( STLA )-backed Leapmotor to follow suit

with affordable smart EVs. Toyota ( TM ), whose market share

in China slid further to 6.7% in 2024 from 8% in 2023, began

selling a $20,000 smart electric car in China last week, aiming

to attract buyers with its advanced features similar to Chinese

rivals.

Leapmotor is due to launch pre-sales of its electric SUV

B10 later on Monday, its first model priced under 150,000 yuan

($20,671.12) featuring lidar and urban navigation capabilities.

Xiaomi ( XIACF ), the world's third-largest smartphone

vendor which launched its first EV one year ago, is already

shaking up the market. It sold 23,728 vehicles last month, while

Tesla's EV sales in the hyper-competitive market fell to 26,777

unit, the lowest level since November 2022.

To increase the appeal of its aging models, Tesla made a

long-awaited update to its autopilot software in China to enable

city navigation in late February.

The U.S. automaker exported 3,911 China-made EVs last

month, down 87.1% from a year earlier.

Overall car exports increased 11% in February,

quickening from a 3% rise in January.

($1 = 7.2565 Chinese yuan renminbi)