Chinese Car Sales Continue Ten-Month Decline, But Exports Provide a Lifeline

Within the ever-shifting Automotiveindustry, what happens in China has a ripple effect across the globe. The sheer weight of the Asian giant in the sales balance of all car manufacturers means that even the slightest stumble sends tremors throughout the entire industry. And so we arrive at the tenth consecutive month of declining car sales within the Chinese market.

Sales Dip in the Chinese Market

Data from July 2026, released by the China Association of Automobile Manufacturers (CAAM), reveals a year-on-year drop of 20% in domestic passenger vehicle sales, reaching 1.47 million units.

Ten Months of New Car Sales Decline in China

July marked the tenth consecutive month that the Chinese Automotive market registered a sales decline, all while vehicle exports have surged by nearly 90% during the same period, reaching one million units. The same trend is occurring in the industrial vehicle sector. Last month's sales figures reveal that despite very weak local demand, factories producing vans and trucks are maintaining production levels to meet sales to foreign buyers.

Electric Vehicles Bear the Brunt

Electric vehicles are bearing the brunt of the sales downturn, both domestically and internationally. During the first half of 2026, total sales of vehicles with 100% electric propulsion systems decreased in China compared to the figures obtained in the first half of 2025. However, despite the sales decline, Chinese companies exported 2.4 million electric vehicles abroad, a figure already very close to the total achieved throughout all of last year, demonstrating that the trend is high and that manufacturers in the Asian country have found a lucrative business lifeline outside of China's borders.

Geely Leads the Export Charge

Geely is an example of how exports are keeping the Chinese Automotive production fabric alive. The company, owner of brands like Volvo and Lynk & Co, reached 474,000 units in exports during the first half of 2026, a 150% increase compared to the same period last year, and already surpassing what was achieved throughout all of 2025.

Industry Maintains Momentum Through Exports

The company has also raised its target for the current year to 920,000 units, relying on state aid that the European Union considers to be distorting trade and margins. In fact, this is the main reason why Brussels activated tariffs on electric vehicles manufactured in China over a year ago.