Beijing: China’s domestic passenger car sales experienced a significant decline in May, marking the eighth consecutive month of decreasing sales, as reported by the China Passenger Car Association (CPCA).
According to Anadolu Agency, passenger car sales in the global leader of the auto market dropped by 22.3% year-on-year, totaling 1.53 million units in May. The data further revealed that during the first five months of 2026, sales fell by 19.7% compared to the same period in the previous year, amounting to 7.18 million units.
The CPCA has adjusted its full-year forecast for China’s automotive market, now predicting an 11% decline, a significant revision from its earlier projection of a 1% decrease. This prolonged slowdown is attributed to several factors, including elevated oil prices due to Middle East conflicts, which have dampened demand for gasoline-powered vehicles. Furthermore, weakened consumer confidence and decreased policy support have negatively impacted the purchase of high-value items like cars.
Sales of electric vehicles and plug-in hybrids, which make up 62.2% of the total passenger car sales, also saw a 7.5% decline in May, continuing a downward trend observed since the start of the year. Despite the downturn in the domestic market, China’s automobile exports have continued to grow robustly.
May witnessed a 74.7% year-on-year increase in total automobile exports, with electric vehicles and plug-in hybrids seeing an impressive surge of 112.6%. This growth in exports has sparked renewed criticism, suggesting that China is exporting surplus production in strategic industrial sectors, such as electric vehicles, while domestic demand remains insufficient.
China has established itself as a major force in global electric vehicle production. However, the sector now faces slower growth domestically following years of rapid expansion, fierce price competition, and evolving subsidy policies. The decline in sales is exerting additional pressure on foreign automakers in China, as domestic brands continue to capture market share with more competitive electric and hybrid models.