China's Auto Market Remains Under Pressure on Sluggish Domestic Demand

By Jiahui Huang

China's auto sales remained weak in June, with retail sales of passenger cars slumping 20.2% in the first half, reflecting subdued and cooling demand after years of rapid expansion.

Retail sales of passenger cars in June fell 23.2% from a year earlier to 1.60 million units, the China Passenger Car Association said Wednesday. Sales last month rose 6.1% compared with May.

The Chinese auto market has seen a significant decline in demand for traditional fuel-powered vehicles, weighed by higher fuel prices, with volumes dominated by sales of new-energy vehicles and overseas sales, the CPCA said. Surging fuel prices and sluggish consumption continue to encourage consumers to purchase electric vehicles and hybrid cars. New-energy cars accounted for 62.8% of total sales in June, according to the CPCA.

Chinese automakers continued to rely on the overseas market to offset slow domestic sales. China exported 877,000 vehicles in June, with exports of new-energy vehicles more than doubling.

In June, Tesla exported 36,171 units made at its Shanghai plant and sold 89,091 units to Chinese buyers.

The country's auto market may improve gradually in the second half, thanks for easing automotive-chip shortages, lower oil prices and improving consumer sentiment, the CPCA said. The agency in June lowered its projection for 2026 retail sales of passenger cars to a 14% decline.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

July 08, 2026 05:38 ET (09:38 GMT)