China's Auto Market Steady in H1 2026: Commercial Vehicles Rise on Subsidies, Passenger Car Sales Under Pressure

The overall trajectory of China's auto market in 2026 has remained relatively stable. Supported by national policies promoting consumption and robust macroeconomic growth, the commercial vehicle segment has seen structural expansion, driven by equipment-upgrade subsidy programs. Notably, both truck and bus markets have shown clear signs of recovery, while electrification of logistics and transportation vehicles has accelerated, resulting in high industry sentiment. In contrast, passenger car retail sales posted continuous negative growth from January to June this year, as policy support—particularly for entry-level consumers—was significantly scaled back in 2026 following the strong stimulus measures implemented in 2025. This led to a marked decline in sales of internal combustion engine (ICE) passenger vehicles. Nevertheless, bolstered by rising exports, automakers maintained relatively steady sales growth in June. During the same period, the new energy vehicle (NEV) market underperformed, while auto exports continued to strengthen. Manufacturer inventories declined slightly, with no signs of industry-wide inventory pile-up.