China reports biggest decline in car sales in two years

China’s auto market recorded its biggest decline in two years in February, with vehicle shipments — including both domestic sales and exports — falling 15.4%, Carscoops reported, citing the China Association of Automobile Manufacturers.

Consumers’ appetite for buying cars is fading in China

The domestic market took the hardest hit, with passenger car sales in China dropping by about 34% from 2025 levels, totaling around 950,000 vehicles.

Some experts believe the figures were affected by the Chinese Lunar New Year celebrations in February. However, analysts say there are likely deeper factors behind the decline.

In recent months, several regions in China have reported reductions in government subsidies and trade-in programs. In addition, problems in the real estate market are making Chinese consumers more cautious about major purchases, including vehicles.

Exports continue to grow

Meanwhile, trends in foreign markets have been the opposite. Exports rose by 58%, reaching nearly 590,000 vehicles.

Chinese brands such as BYD and Geely are actively expanding into markets in Southeast Asia, the Middle East, Latin America and Europe, relying on competitive prices and a broad lineup of electric vehicles. However, even this export growth could not offset the decline in domestic sales.

Another notable trend is weakening interest in electric vehicles. Although the segment grew by about 17.7% in 2025, domestic sales of battery-electric and hybrid vehicles fell by 30% in the first two months of the year.

As many Chinese manufacturers have accumulated large inventories, they are eager to cut prices to boost sales. While this strategy helps move vehicles, it significantly reduces automakers’ profits.