China's automotive market contracted for a 10th consecutive month in July, with sales dropping 21.1% year-on-year to 1.47 million vehicles. Domestic passenger vehicle sales have declined 20.5% in the first seven months of 2026.
The sustained downturn has hit foreign automakers hard, with BMW, Volkswagen, and Mercedes-Benz posting profit declines tied to the market's difficulties. Chinese manufacturers including BYD, Geely, and SAIC are gaining market share, particularly in electric and hybrid vehicles.
Exports provided a bright spot, rising 88.2% to 923,000 vehicles in July. Electric and plug-in hybrid exports surged 147.8% year-on-year, though domestic EV sales fell 3.9%. Leapmotor reported global sales exceeding 100,000 vehicles in July, more than doubling its year-earlier figure.