In the past year, half of the automobile dealers in China failed to meet their annual sales targets, indicating a decline in the prosperity of the automotive circulation industry. As we enter 2026, it seems that automobile dealers are still facing tough times.
According to reports from media outlets such as “First Financial” and “Beijing Business Daily” on January 6th, data from the China Automobile Dealers Association shows that in December 2025, the inventory alert index of Chinese automobile dealers reached 57.7%, an increase of 7.5 percentage points compared to the previous year and 2.1 percentage points month-on-month. With the inventory alert index at 57.7%, surpassing the boom-bust line of 50%, it is evident that the automotive circulation industry is experiencing a downturn.
For dealers, a survey by the China Automobile Dealers Association reveals that customer traffic has decreased, demand has declined, and new car sales profits have fallen. Various factors have led to only 90% of dealers completing 50% of their annual tasks, failing to meet their full-year sales targets.
Fanyu, Deputy Secretary-General of the Industry Coordination and Development Working Committee of the China Automobile Dealers Association, stated at a monthly analysis meeting, “In December 2025, there was no traditional peak season, and the overall trend remains subdued.”
As we step into 2026, while some institutions predict a positive start in January, the operational situation for automobile dealers still faces uncertainties. Fanyu believes that consumer tightening, policy changes, price competition weakening profits, and the operation falling into a vicious cycle of new car gross profit inversion, high inventory, and financial pressure will lead dealers to encounter greater competitive pressures and uncertainties.