China’s passenger-car sales declined in the first nine months of 2026, while auto-manufacturing profits fell even as industrial profits overall rose. Analysts linked fierce domestic competition to automakers’ push to find buyers abroad.
The China Passenger Car Association (CPCA) said retail sales totaled 13.33 million vehicles from January through September, a 21.7% drop year over year. The association forecast full-year domestic passenger-car retail sales of 18.5 million vehicles in 2026, down 22% from 2025.
Auto-manufacturing profits decreased 22.8% year over year in the same period, the National Bureau of Statistics said. Industrial profits overall rose 15.5% from January through September compared with 2025, although September showed weaker momentum than the previous eight months, it said. Sales of new-energy vehicles, a category that includes electric vehicles, fell 12.8% in January-September, according to CPCA.
China’s autumn season has traditionally been a peak period for car buying, but Li Ke, a salesman at a Beijing dealership, told CNBC he was seeing only two or three transactions per week, compared with deals signed daily in earlier years. He said no other buying season in his 26-year career had been slower, apart from the COVID-19 pandemic. “Customers are watching every penny,” he said. Li said shoppers were spending longer weighing which features justified the cost, rather than buying on impulse.
Salespeople cited by CNBC said the government had scaled back cash-for-clunkers subsidies and tax breaks for electric-vehicle purchases. Li said buyers were taking longer to replace cars. His dealership moved from a costly street-facing location to premises with lower rent to preserve cash.
Analysts linked fierce competition and price wars in China to carmakers’ overseas push, CNBC reported. They also said Beijing fears the United States and Europe could coordinate trade barriers against Chinese car exports. Chinese automakers have pursued European production plans in Hungary and Spain.
