The China Automobile Industry Association projected on November 11 that domestic sales of passenger cars in mainland China for this year may fall below 19 million units. Chen Shihua, the association’s deputy secretary-general, indicated that the overall situation for the automotive market is “not very optimistic.”
According to reports from Economic Daily, the association revealed that the domestic sales of passenger cars in the first ten months of this year reached 14.52 million units, representing a significant decline of 25.2% compared to the same period last year. Last year, the total domestic sales stood at 24.065 million units. If this year’s sales do indeed total less than 19 million, it would mark a decrease of more than 5 million units compared to the previous year.
In the same timeframe, while the export of passenger cars showed impressive growth of 69.6%, the overall sales—including exports—still experienced a decline of 6.6%.
Retail sales, which directly cater to consumers, are also on a downward trend. On November 9, the China Automobile Dealers Association’s Passenger Car Market Information Joint Conference (commonly known as the Passenger Car Association) announced a year-on-year drop of 27.1% in passenger car retail sales for October, with new energy vehicles seeing a drop of 13.7%.
A survey conducted by the China Automobile Dealers Association at the end of October indicated that foot traffic in stores quickly diminished in the second half of the month following the “Golden Week” holiday, leading to a weak performance during the traditional sales peak of October.
Furthermore, as reported by Reuters on November 11, Daimler AG’s CEO, Ola Källenius, stated that the drop in the Chinese car market this year has exceeded initial expectations. Citing data, he mentioned that the high-end luxury car market in China has contracted by 30% over the year.
The National Bureau of Statistics of China released data on October 27 showing that, for the first three quarters of this year, the total profit margin in the large-scale automotive manufacturing sector was 267.54 billion yuan, which represents a year-on-year decrease of 22.8%. During this same time, operating income experienced a modest growth of 2.6%, while operating costs increased by 3.8%, indicating that the growth in costs outpaced income growth.
Additional data revealed that the capacity utilization rate in the automotive manufacturing sector for the third quarter stood at 66.2%, down 7.1 percentage points from the same period last year.
According to an October survey by the China Automobile Dealers Association, dealerships continue to experience widespread losses on new car sales, as prices remain below purchase costs with no significant improvements in this situation. Excessive inventory, pressure from manufacturers, and high sales targets are continuously straining store finances, leading to concerns over cash flow and profitability.
Moreover, the number of vehicles requiring maintenance and service is also declining. Businesses related to insurance and repair of accident-damaged vehicles are further pressuring store profitability. Among the surveyed dealers, an overwhelming 91.1% anticipated that the overall market sales for the year would experience a year-on-year decline.
In its market analysis for October, the Passenger Car Association noted that the purchase performances of first-time car buyers have been poor, particularly in the micro and compact car segments.
The association pointed out that recent policies mainly support the upgrading of consumption; however, the increase in subsidy thresholds has somewhat suppressed the demand for vehicles among those who do not yet own a car. A lack of new models for gasoline-powered vehicles and rising operational costs have also adversely affected first-time purchase demand.
On October 26, Cui Dongshu, the Secretary-General of the Passenger Car Association, analyzed that certain demands were preemptively released towards the end of 2025, resulting in a diminished stimulating effect from the trade-in subsidies this year. The overall willingness of consumers to spend appears to be low.
The China Automobile Dealers Association indicated that consumers are generally waiting for year-end discounts, engaging in repeated price comparisons, which extends the decision-making time for car purchases.