Sales of Chinese-made vehicles, including exports, fell 2.1% to 2.629 million in May 2026 from 2.686 million last year, according to passenger car and sales data compiled by the China Association of Automobile Manufacturers (CAAM). Domestic sales fell more than 20% year-on-year to 1.699 million units last month, after rising 10% to 2.135 million units a year earlier, while exports rose more than 69% to 930,000 units from 551,000 units.
Overall purchases of small cars fell 4.2% to 2.253 million last month, while sales of commercial vehicles increased 12.5% to 376,000. Car production in the country decreased by 1.2% to 2.616 million.
China’s small car market this year has struggled to cope with previously strong prices and has been hit by the withdrawal of some government subsidies and tax exemptions for new electric vehicles (NEVs) at the end of last year. The government also took action this year aimed at ending a long-running “bottom-up” price war between domestic manufacturers, which has been seen to hurt the industry’s long-term growth prospects, as carmakers are no longer allowed to sell their cars below production costs. To help maintain affordability, manufacturers and dealers are now offering ‘long-term’ auto financing plans, with repayment terms of up to eight years.
The economy grew by a better-than-expected 5.0% year-on-year in the first quarter of 2026, after growth slowed to 4.5% in the previous quarter, driven mainly by strong exports despite a tax hike from the US last year. Consumer spending picked up slightly, helped by recent government stimulus measures, but growth remained sluggish at 2.4% year-on-year.
In the first five months of 2026, sales of cars made in China fell 4.2% to 12.207 million units after rising 11% to 12.748 million units last year, while sales of small cars fell 6% to 10.318 million and car purchases rose 1.8. Domestic sales fell by 21% to 8.148 million units in the period, while exports increased by more than 63% to 4.059 million units.
Sales of Chinese-made new energy vehicles (NEVs), including mainly battery-powered vehicles and plug-in hybrids, increased by 3.5% to 5.802 million units in the five-month period, domestic sales fell by about 17% to 3.969 million units, while exports doubled to 1.833 million units Overall sales of battery electric vehicles increased by over 8 million units to 3.845 million units in the period, while sales of plug-in hybrid vehicles (PHEVs) fell by 4.6% to 1.957 million units.
After last year’s strong growth, combined with the reduction of government subsidies and the newly introduced price controls, China’s domestic car market looks saturated, while consumer sentiment in the country is also very cautious. GlobalData predicts that small car sales will decline by more than 4% to 25.75 million units in 2026, down from 26.9 million in 2025, followed by a 1% decline to 25.4 million units in 2027.
Producer concerts
SAIC car reported a 2% decline in group sales to 1,650,600 units in the first five months of 2026., despite a 46% increase in overseas sales to 588,741 units, while overall NEV sales rose 13% to 594,785 units. The SAIC-GM-Wuling joint venture reported sales down 12% to 551,094 in the period, while passenger car unit SAIC Motor reported a 44% increase to 434,101. SAIC-VW sales fell 30% to 278,640, while SAIC-GM sales fell 3% to 192,724.
BYD reported a 20% decline in global sales to 1,405,039 units year to date, domestic sales fell 43% to 790,569 units while international sales rose 64% to 614,470 units. Overall sales of passenger battery electric vehicles (BEVs) fell 18% to 665,995 units, while sales of plug-in electric vehicles (PHEVs) fell 22% to 714,076, and NEV sales fell 10% to 24,968 units.
Geely Autoexcept for the main overseas subsidiaries and joint ventures including Volvo, Polestar, and Proton, reported a slight increase in global sales to 1,182,159 units year to date, supported by a 158% increase in overseas sales to 370,362 units.
Chery cars global sales increased 4% to 1,026,517 in the first five months of 2026, driven by a 69% increase in overseas sales to 753,000. Changan Auto sales fell 13% to 976,100 units, in the period GAC Group, including its alliances with Toyota and Honda, reported a nearly 4% increase in global sales to 628,200 units. Great Wall Motor’s Global sales increased 3.6% to 475,815, including 231,258 units sold abroad.
Tesla Shanghai factory sales also rose 29% to 378,858 units year to date from previous weak volumes, with exports up 112% to 192,823 units, while retail sales in China fell 8% to 186,000 units.
“China’s auto sales fall 2% in May” was originally developed and published by Just Auto, a product of GlobalData.
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