China’s car sales extend decline in November with biggest drop in 10 months

[BEIJING] China’s annual car sales dropped 8.5 per cent in November in a second straight monthly decline, representing their biggest fall in 10 months, data showed on Monday (Dec 8).

The decline comes amid a waning scramble to buy vehicles before government subsidies dwindle at year-end.

Car sales in the world’s biggest auto market stood at 2.24 million in November, following October’s slide of 0.8 per cent, based on the data from the China Passenger Car Association.

The deeper slide was “abnormal”, as sales have generally been quite strong in the years’ final two months, said Cui Dongshu, the industry body’s secretary-general. However, he evoked conditions 17 years ago, adding: “A similar abnormality occurred in 2008 when consumption was under pressure.”

Sales of electric vehicles (EVs) and plug-in hybrids (PHEVs) made up a record 58.9 per cent of total car sales.

Subsidised auto trade-ins in favour of EVs and PHEVs exceeded 11.2 million units in the first 11 months, official data showed.

Reduced government subsidies near the end of the year are seen as denting consumer sentiment nationwide.

Car sales are forecast to be largely flat in 2026 when competition in China becomes even stiffer, with “a possible all-time high number of new models”, analysts at China Merchants Bank International (CMBI) said in a note.

To spur sales before purchase-tax breaks for EVs and PHEVs halve from 2026, many automakers have also rolled out subsidies of up to 15,000 yuan (S$2,751), for orders before year-end which may not get delivered until next year.

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As woes surrounding overcapacity and excessive competition mount, Beijing has dropped EVs from a list of strategic industries in a roadmap for the next five years, signalling perhaps a more challenging time ahead.

Entangled in a battle in the budget segment with rivals such as Geely and Leapmotor, whose sales kept hitting new highs, domestic EV giant BYD ended November with lower sales than in 2024.

It was BYD’s third month of declining sales globally, despite record overseas shipments in November. The automaker has achieved 91 per cent of a trimmed sales target for this year.

Tesla’s sales in China rose to 73,145 units in November after October’s fall to a three-year low of 26,006.

Its aggressive new rival Xiaomi delivered more than 40,000 EVs for a third consecutive month, having already met an annual sales target of 350,000 vehicles.

Overall, car export growth soared to 52.4 per cent from 27.7 per cent in October.

The majority of China’s car export growth is expected to come from EVs and PHEVs in 2026, their exports rising 40 per cent from this year to a projected 2.83 million vehicles, CMBI estimates. REUTERS