China’s car market is heading for its worst year since 2021. Sales fell 20% in the first half.
TL;DR
China’s passenger car sales fell 20.2% in H1 2026 to 8.7M units. ICE vehicles down 39% in June. Exports up 82%. Industry margins at 3.4%. A shakeout is coming.
China’s passenger car sales fell 20.2% in the first half of 2026 to 8.7 million units, and the China Passenger Car Association has lowered its full-year forecast to a 14% decline, projecting 20.4 million deliveries, down from a record 23.7 million in 2025. Citic CLSA’s Xiao Feng expects a 20% full-year drop. “This is going to continue to be a brutal year,” said Tu Le, founder of Sino Auto Insights.
The collapse is concentrated in petrol cars. Retail sales of internal combustion engine vehicles fell 39% year-on-year in June, with pure gasoline models down 42%, accounting for 78% of the total decline that month. Transportation energy costs soared 15.3% year-on-year in June, crushing demand for cars that burn...
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