Sales of Chinese-made vehicles, including exports, declined by 2.1% to 2.629 million units in May 2026 from 2.686 million units a year earlier, according to passenger car and commercial vehicle wholesale data compiled by the China Association of Automobile Manufacturers (CAAM). Domestic sales plunged by over 20% year-on-year to 1.699 million units last month, after rising by 10% to 2.135 million units a year earlier, while exports surged by over 69% to 930,000 units from 551,000 units.
Overall light passenger vehicle sales declined by 4.2% to 2.253 million units last month, while commercial vehicle sales rose by 12.5% to 376,000 units. Total vehicle production in the country declined by 1.2% to 2.616 million units.
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China’s light passenger vehicle market this year has struggled against strong year-earlier volumes and has also been affected by the withdrawal of some government subsidies and tax exemptions for new energy vehicles (NEVs) at the end of last year. The government has also taken action this year aimed at ending the prolonged “race-to-the-bottom” price war among domestic manufacturers, which was seen as damaging to the industry’s long-term growth prospects, with automakers no longer allowed to sell their vehicles at below the cost of production. To help maintain affordability, manufacturers and dealers are now offering ‘ultra-long-term’ auto financing programmes, with repayment terms of up to eight years.
The economy expanded by a better than expected 5.0% year-on-year in the first quarter of 2026, after growth slowed to 4.5% in the previous quarter, driven mainly by strong exports despite import tariff hikes by the US last year. Consumer spending picked up slightly, helped by recent government stimulus measures, but growth remained sluggish at 2.4% year-on-year.
In the first five months of 2026, sales of Chinese-made vehicles declined by 4.2% to 12.207 million units after rising by 11% to 12.748 million units a year earlier, with sales of light passenger vehicles falling by over 6% to 10.318 million units while commercial vehicle sales rose by 8% to 1.889 million units. Domestic sales declined by 21% to 8.148 million units in this period, while exports surged by over 63% to 4.059 million units.
Sales of Chinese-made new energy vehicles (NEVs), comprising mainly battery-powered and plug-in hybrid vehicles, increased by 3.5% to 5.802 million units in the five-month period, with domestic sales falling by almost 17% to 3.969 million units, while exports more than doubled to 1.833 million units. Overall sales of battery electric vehicles rose by over 8% to 3.845 million units in this period, while sales of plug-in hybrid vehicles (PHEVs) fell by 4.6% to 1.957 million units.
Following last year’s strong growth, combined with reduced government incentives and the newly introduced price controls, the Chinese domestic vehicle market looks saturated, while consumer sentiment in the country also remains very cautious. GlobalData forecasts that light vehicle sales will decline by over 4% to 25.75 million units in 2026, down from 26.9 million units in 2025, followed by a 1% decline to 25.4 million units in 2027.
Manufacturer performances
SAIC Motor reported a 2% decline in group sales to 1,650,600 units in the first five months of 2026, despite a 46% surge in overseas sales to 588,741 units, while overall NEV sales increased by 13% to 594,785 units. The SAIC-GM-Wuling joint venture reported a 12% sales decline to 551,094 units in this period, while the group’s SAIC Motor passenger vehicle unit reported a 44% surge to 434,101 units. SAIC-VW’s sales plunged by 30% to 278,640 units, while SAIC-GM’s sales fell by 3% to 192,724 units.
BYD reported a 20% drop in global sales to 1,405,039 units year-to-date, with domestic sales plunging by 43% to 790,569 units while overseas sales surged by 64% to 614,470 units. Overall sales of passenger battery electric vehicles (BEVs) dropped by 18% to 665,995 units, while sales of passenger plug-in hybrid electric vehicles (PHEVs) fell by 22% to 714,076 units, and commercial NEV sales fell by 10% to 24,968 units.
Geely Auto, excluding key overseas subsidiaries and joint ventures including Volvo, Polestar, and Proton, reported a slight rise in global sales to 1,182,159 units year-to-date, supported by a 158% surge in overseas sales to 370,362 units.
Chery Automobile’s global sales increased by 4% to 1,026,517 vehicles in the first five months of 2026, driven by a 69% surge in overseas sales to 753,000 units. Changan Auto sales fell by 13% to 976,100 units, while GAC Group, including its joint ventures with Toyota and Honda, reported an almost 4% increase in global sales to 628,200 units. Great Wall Motor’s global sales increased by 3.6% to 475,815 units, including 231,258 units sold overseas.
Tesla’s Shanghaifactory sales rebounded by 29% to 378,858 units year-to-date from weak year-earlier volumes, with exports surging by 112% to 192,823 units, while retail sales in China declined by 8% to 186,000 units.
