Sales of Chinese-made vehicles, including exports, declined by over 15% to 1.805 million units in February 2026 from 2.130 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 33% year-on-year to 1.133 million units last month, after rising by 40% to 1.69 million units a year earlier, while exports surged by 52% to 672,000 units. Vehicle production in the country declined by over 20% to 1.672 million units.
China’s domestic vehicle market is struggling with slowing economic growth and the recent withdrawal of some government subsidies and tax exemptions for new energy vehicles (NEVs). Sales last month were also affected by significantly fewer working days, due to the Lunar New Year holidays falling in February this year rather than January last year.
China’s economy expanded by a slower-than-expected 4.5% year-on-year in the fourth quarter of 2025, slowing from 4.8% in the third quarter, reflecting sluggish consumer spending and weak investment. Full-year GDP growth was 5%, supported by strong manufacturing and export growth despite the ongoing trade tensions with the US.
The government recently introduced new regulations 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.
In the first two months of 2026, Chinese vehicle sales declined by almost 9% to 4.152 million units after rising by 13% to 4.552 million units a year earlier, with sales of light passenger vehicles falling by almost 11% to 3.524 million units while commercial vehicle sales rose by almost 4% to 627,000 units. Domestic sales declined by 23% to 2.8 million units in this period, while exports surged by over 48% to 1.352 million units.
Sales of Chinese-made new energy vehicles (NEVs), comprising mainly battery-powered and plug-in hybrid vehicles, declined by almost 7% to 1,710,000 units in the first two months of the year following a 52% rise to 1,835,000 units a year earlier. Domestic NEV sales fell by almost 28% to 1,126,000 units, while exports more than doubled to 584,000 units.
Following last year’s strong growth, combined with reduced government incentives and the newly introduced price controls, the Chinese domestic vehicle market looks somewhat saturated, while consumer sentiment in the country also remains cautious. GlobalData is forecasting just a slight rise in light vehicle sales in the country to 27.2 million units in 2026, after rising by almost 6% to 26.9 million in 2025, followed by a 3% decline to 26.5 million units in 2027.
Manufacturer performances
SAIC Motor has regained its crown as China’s largest vehicle producer, with the group’s global sales rising by almost 7% to 596,878 units in the first two months of 2026, driven by a 49% rise in overseas sales to 203,553 units, while overall NEV sales increased by over 6% to 156,716 units. The SAIC-GM-Wuling joint venture reported a slight increase in global deliveries to 206,029 units in the two-month period, while the group’s SAIC Motor passenger vehicle unit reported a 45% sales increase to 138,888 units. SAIC-VW’s sales fell by 12% to 121,940 units, while SAIC-GM’s sales increased by 9% to 71,284 units.
Geely Auto, excluding key overseas subsidiaries and joint ventures including Volvo, Polestar, and Proton, reported a 1% rise in global sales to 476,327 units year-to-date, supported by a 10% increase in global NEV sales to 241,740 units and a 128% surge in exports to 121,385 units.
BYD reported a 35% drop in global sales to 400,241 units year-to-date, with domestic sales plunging by 58% to 199,159 units while exports increased by over 50% to 201,082 units. Overall sales of passenger battery electric vehicles (BEVs) dropped by 35% to 162,788 units, while sales of passenger plug-in hybrid electric vehicles (PHEVs) fell by 29% to 230,512 units and commercial NEV sales fell by 20% to 6,941 units.
Chery Automobile’s global sales increased slightly to 361,034 vehicles in the first two months of 2026, with domestic sales plunging by almost 40% to 116,500 units, while exports surged by 45% to 244,534 units. Changan Auto sales fell by 34% to 286,622 units, while GAC Group, including its joint ventures with Toyota and Honda, reported a 3% increase in global sales 203,100 units. Great Wall Motor’s sales increased by almost 26% to 162,906 units, driven by a 40% rise in overseas sales to 82,953 units.
Tesla’s Shanghaifactory sales rebounded by 36% to 127,728 units year-to-date from weak year-earlier volumes, with exports more than doubling to 71,037 units while retail sales in China declined by 6% to 56,691 units.
