China’s car market posted its steepest drop in ten months, with November sales falling 8.5% year-on-year to 2.24 million units, the second straight monthly decline, as consumers pulled back ahead of shrinking government subsidies for vehicle purchases.
Reuters reported that the China Passenger Car Association (CPCA) flagged the sharp drop as “abnormal” for the year-end period, echoing weakness last seen during the 2008 downturn. “Consumption is under pressure,” said CPCA secretary-general Cui Dongshu.
Despite the slump, new-energy vehicles (NEVs) such as electric cars and plug-in hybrids hit a record 58.9% share of total sales as more than 11.2 million subsidised electric vehicle and plug-in hybrid EV (PHEV) trade-ins were recorded from January to November, highlighting the shift toward electrification even as incentives fade.
Analysts expect China’s auto sales to remain largely flat in 2026 amid intensifying competition and a flood of new models. Automakers are rushing to secure year-end orders before EV and PHEV purchase-tax breaks halve in 2026, offering rebates of up to 15,000 yuan, even for cars delivered next year.
