China's July Car Sales Suggest Stronger 2nd Half
By wchung | 25 Mar, 2026

A small but significant rise in China’s July car sales and output is being seen as an encouraging sign of a rebound in the making for the year’s second half.

China auto sales rose 2.18 percent year-on-year to reach 1.28 million units in July, according to the China Association of Automobile Manufacturers (CAAM) Wednesday.

The nation’s auto production edged up 1.26 percent to 1.31 million cars in July. On a month-on-month basis, however, July car sales and output were down 11.19 percent and 6.96 percent, respectively. However, July is considered one of the year’s weak sales months.

June auto sales and output had shown the first increases after two consecutive months of decline.

Combined auto sales for the first seven months of the year rose 3.22 percent over the same period of 2010 to pass 10.6 million units. Output rose 2.33 percent to 10.46 million units.

China’s auto boom began cooling off after the government removed tax incentives and cities like Beijing severely limited new car licenses in an effort to combat traffic congestion.

In 2009 the central government slashed the auto tax for small-engine vehicles from 10 percent to 5 percent. In 2010 the tax was raised slightly to 7.5 percent in 2010.

On January 1, 2011 Beijing launched a quota system for new car registrations that cut licenses for new cars to 240,000 from 800,000 last year.

Industry watchers expect new car sales growth to strengthen in the second half due to new policies the central government is currently considering to stimulate the auto industry, prompting sales growth of around 5 percent.

Also September and October are peak months that normally dwarf other months.

Last year China’s auto sales surged more than 32 percent year-on-year to hit 18.06 million vehicles while auto output hit 18.26 million for a 32.44 percent jump. China has been the world’s leading auto market for the past two years, surpassing U.S. auto sales by about 5 million units each year. The gap is expected to continue widening indefinitely.