China’s domestic car demand comes under pressure, industry association says

Wednesday 10 June 2026 - 08:15

China’s domestic automobile market is facing increasing pressure, with demand declining more sharply than expected at the start of the year and expected to remain weak throughout 2026, according to a senior industry representative.

Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers (CAAM), stated that stabilizing domestic demand has become a key priority for the sector amid slowing consumer activity.

Recent industry data indicates that total vehicle sales in China fell by 2.1% in May compared with the same period last year. More notably, domestic sales dropped by 20.4% year-on-year, highlighting a significant weakness in local demand.

In contrast, vehicle exports continue to grow strongly, rising by 68.7% in May. This surge in overseas shipments has become an essential support factor for the industry, helping to offset the slowdown in the domestic market.

The automotive sector, one of the pillars of China’s manufacturing economy, is increasingly relying on international markets as internal consumption weakens. Analysts suggest that this shift reflects broader economic challenges, including cautious consumer spending and uneven recovery across industries.

Despite the slowdown at home, Chinese manufacturers continue to expand their global footprint, particularly in electric vehicle markets, where they remain highly competitive.

The outlook for 2026 suggests continued pressure on domestic sales, making export performance a critical driver for the industry’s overall stability.