China automotive market sees domestic sales slump amid export surge

China’s automotive market is experiencing a sharp divergence between domestic demand and international trade. In July 2026, domestic passenger vehicle sales fell approximately 20% year-on-year to roughly 1.47 million units, marking the tenth consecutive monthly decline.

Conversely, vehicle exports surged nearly 90% year-on-year, reaching close to 1 million units. This growth is largely driven by electric vehicles; in the first half of 2026, Chinese companies shipped approximately 2.4 million EVs overseas, nearly matching their total shipments for the entire year of 2025.

This shift is forcing legacy global automakers to rethink their product lineups and global strategies as they face shrinking market shares in China and increasing competition from low-cost Chinese EV exports in international markets.