China's Auto Market May See Negative Growth in 2026, Pressure in H1, Recovery Expected in H2

On March 12, Cui Dongshu, Secretary-General of the Passenger Car Association of China (CPCA), stated that due to the high base effect from 2025, China's auto market will face significant growth pressure in the first half of 2026, and passenger vehicle retail sales for the full year may decline year-over-year. Data shows that retail sales of passenger vehicles in the first two months of 2026 totaled 2.578 million units, down 18.9% year-on-year; however, exports remained robust at 1.136 million units, up 54.6% year-on-year. Cui expects the retail sales decline in March to narrow somewhat but still unlikely to return to positive growth. Overall, he forecasts that wholesale vehicle sales in 2026 will remain roughly flat compared to last year, with exports continuing to provide support, while weak domestic demand will keep the market sluggish in the first half, with a gradual recovery expected in the second half.