China auto sales face worst year since 2021 as demand weakens

According to CNBC, China’s passenger vehicle market is headed for its worst year since 2021 after sales fell 20.2% in the first half of 2026, prompting the China Passenger Car Association to cut its full-year retail sales forecast to a 14% decline from a previous view of flat growth. The group now expects 20.4 million deliveries in 2026, down from a record 23.7 million last year, while first-half sales totaled 8.7 million units. Citic CLSA’s Xiao Feng said he expects auto sales to fall 20% this year and sees new energy vehicle sales dropping 5% to 6%, while Sino Auto Insights founder Tu Le said the industry will continue to face intense competition. The article said transportation energy costs rose 15.3% year-on-year in June, ICE vehicle retail sales fell 39%, and industry profit margins dropped to 3.4% in January-May 2026 as profits fell 20% year-on-year. Volkswagen’s first-half deliveries in China fell 25.9%, while BYD reported 1.8 million sales, Geely 1.4 million and Leapmotor 356,000. CPCA also said passenger vehicle exports rose 82.3% year-on-year to 877,000 units in June.