Abstract: Over the past three decades, China has grown into a powerhouse for powder metallurgy (PM) parts production. Supported by a thriving and diversified domestic market for PM parts, the domestically-owned PM companies are now competing with international market leaders. China’s PM industry, however, faces the same challenges as the rest of the world’s producers ― the transition to vehicle electrification. China is a huge market and the PM applications in China are diverse. The rapid development of new energy vehicles is a challenge, but it will also bring new development opportunities. The development and current situation of the PM parts industry were analyzed by Prof. Cao and Dr. Qiu in this paper, the trends in China’s automotive industry and the impact on the PM industry were discussed, the coping strategies with the transformation of the automobile industry were proposed, and the future development of the powder metallurgy industry was prospected.