China Car Sales Drop Most in 2 Years

China’s total vehicle sales declined 15.4% year-on-year to 1.801 million units in February 2026, following a 3.2% fall in the previous month, according to data from China Association of Automobile Manufacturers. This marked the sharpest drop since February 2024, as the end of a tax break for electric vehicles and reduced government subsidies amplified the usual slowdown in demand during the Lunar New Year holiday period. Sales of new energy vehicles (NEVs) dropped 14% to 765 thousand units, highlighting continued weakness in demand for new-energy cars. Sales at home plunged 34.2% to 950 thousand units, partially offsetting a 58% surge in exports, which totaled 586 thousand units. For the January-February period, total vehicle sales were down 10.7%, with domestic sales falling 26% while exports jumped 54%. However, the ongoing conflict in the Middle East has clouded the outlook for exports, as the region accounted for around one-fifth of China’s vehicle exports last year.

China’s total vehicle sales dropped 3.2% year-on-year to an eleven-month low of 2.346 million units in January 2026, after a 6.2% fall in December 2025, according to data from the China Association of Automobile Manufacturers (CAAM). New energy vehicle (NEV) sales edged up 0.1% yoy to 945 thousand units, marking the eleventh consecutive monthly increase but below the 1 million mark for the first time since March 2025. Sales at home dropped 19.5% yoy to 1.4 million units, the steepest fall since February 2024. Monthly, total car sales plunged 28.30% in January, following a 4.6% drop recorded in December. Last month, CAAM projected China’s overall passenger vehicle sales would rise 1% year-on-year to reach 34.75 million units in 2026. NEV sales are projected to reach 19 million units in 2026, climbing 15.2% year-on-year. In 2025, China’s vehicle sales grew 9.4% year-on-year to a record high of 34.4 million units, accelerating from 4.5% in the previous year, with NEV sales surging 28.2%.

China’s vehicle sales grew 9.4% year-on-year to a record high of 34.4 million units in 2025, accelerating from 4.5% in the previous year, with new energy vehicle (NEV) sales surging 28.2%, according to data from the China Association of Automobile Manufacturers (CAAM). The figure surpassed the government’s target for 2025. Last October, eight government departments, including the Ministry of Industry and Information Technology, set a target of approximately 32.3 million vehicle sales for 2025, up around 3% yoy, with NEV sales expected to reach 15.5 million units, a projected 20% yoy increase. In December alone, vehicle sales fell 6.2% yoy to 3.273 million units, reversing a 3.4% rise in November. NEV sales rose 7.2% yoy, marking the tenth consecutive monthly increase. For this year, car sales are set to grow 1%, while NEV sales are expected to slow by 15.2%, and exports are likely to rise 4.3%. Monthly, total car sales fell 4.6% in December, reversing a 3.2% gain recorded in November.