According to the latest data, the domestic demand in the Chinese car market continues to be weak. In August, the retail sales of passenger cars nationwide decreased by 23.6% compared to the same period last year, with a 40% drop in retail sales of fuel cars. From January to August, the cumulative retail sales of passenger cars decreased by 20.8%.
On September 8, data released by the China Automobile Dealers Association’s Passenger Car Market Information Joint Committee showed that in August 2026, the retail sales of passenger cars nationwide were 1.541 million units, a 23.6% year-on-year decrease, with a 5.5% month-on-month growth. In the first 8 months of this year, the cumulative retail sales of passenger cars reached 11.716 million units, down 20.8% year-on-year.
In August, the retail sales of new energy passenger cars were 1.005 million units, a 10.1% decrease compared to the same period last year, with a 5.7% increase month-on-month. The market penetration rate of new energy vehicles in domestic passenger car sales reached 65.2%, hitting a new high.
The decline in sales of traditional fuel cars is particularly pronounced. In August, retail sales of conventional fuel passenger cars were approximately 540,000 units, down 40% year-on-year, with a 5.1% increase month-on-month; wholesale sales were 840,000 units, down 29% year-on-year, with a 5% increase month-on-month. The year-on-year decrease in retail sales of fuel cars was as much as 40%, indicating that consumer demand for cars among residents remains weak.
The Joint Committee pointed out that the Chinese passenger car market in August showed characteristics of “weak overall recovery, stronger month-on-month performance, and extreme structural differentiation.” Despite some improvement in the month-on-month comparison, the year-on-year decline is still significant, indicating that domestic car consumer demand remains weak, and the market is undergoing a deep adjustment.
Additionally, while terminal sales continue to decline, inventory pressure on car dealers is also increasing.
On August 31, data released by the China Automobile Dealers Association showed that the inventory alert index for car dealers in August 2026 was 62.3%, up 5.3 percentage points year-on-year and 1.2 percentage points month-on-month. In July it was 61.1%, and in June it was 57.2%, showing a continuous increase for three consecutive months.
The index uses 50% as the warning line. The higher the index, the lower the market demand, the greater the inventory pressure, and the higher the operational pressure and risk for dealers.