China Domestic Car Sales Fall Again but Exports Stay Strong
By Reuters | 08 Jul, 2026

Domestic passenger vehicle sales fell 23.4% on year to 1.62 million units in June following a 22.3% decline in May but exports jumped 82.1% to 882,000 units.

Car sales in China fell for a ninth consecutive month in June, as automakers increasingly turn to export markets to cushion the impact of sluggish local demand.

Domestic passenger vehicle sales fell 23.4% from a year earlier to 1.62 million units last month, following a 22.3% decline in May, data from the China Passenger Car Association (CPCA) showed on Wednesday.

Car exports jumped 82.1% to 882,000 vehicles last month.

First-half domestic sales were down 20.4% to 8.8 million vehicles, while car exports rose 70.6% to 4.28 million.

The run of sales declines in China reflects tightened household spending in a sputtering economy, where uneven growth has weighed on price-sensitive consumers the most.

With reduced government subsidies particularly for budget cars, sales of gasoline and electrified models priced under 80,000 yuan ($11,776) saw falls of 34% and 43%, respectively, in the first five months of the year, according to data from the China Association of Automobile Manufacturers.

The premium car segment has been expanding, however, with 70% of new car sales this year coming from buyers seeking to upgrade old gasoline vehicles to new models equipped with advanced features such as air suspension, said Wang Xianbin, vice president at Gasgoo Research Institute.

"Those with purchasing power are willing to trade up, while those with less disposable income may simply opt not to buy a car," CPCA secretary-general Cui Dongshu said.

The trend has largely benefited emerging Chinese premium brands such as Nio, while traditional German marques have struggled, Wang said.

"Chinese consumers are no longer buying into German quality and German-styled luxury," Wang said.

Mass-market brands including Volkswagen, General Motors, Toyota, Honda and Nissan have lost market share to Chinese rivals amid an industry transition towards smart electric vehicles.

Amid cut-throat competition, automakers including foreign companies' joint ventures with Chinese partners have stepped up efforts to expand abroad, particularly in Europe, Southeast Asia, Latin America and the Middle East.

Chinese EV giant BYD, close to making a decision on its second European auto plant, has relied on strong exports to offset slowing sales at home.

Tesla has been an exception among foreign brands, with its Chinese sales largely stable in the first half and its Model Y still the best-selling SUV.

($1 = 6.7932 Chinese yuan renminbi)

(Reporting by by Qiaoyi Li, Zhang Yan and Ju-min Park. Editing by Andrew Heavens and Mark Potter)