China’s car market is heading for another weak month, with the China Passenger Car Association forecasting October passenger car retail sales of about 1.6 million, down 28.9% year on year and 1.1% lower than September. New energy vehicle retail sales are forecast at about 1.07 million, down 16.5% year on year, putting NEV penetration at 66.9%, just below September’s record of 67.0%. September and October are traditionally China’s peak selling months, but the association says the boost from seasonal factors has weakened significantly this year, according to reports on the forecast.
Buyers hold off
The association points to weak household income expectations, with buyers holding off on purchases, and to efforts to curb excessive price competition, which have limited discounting and squeezed dealer profits. Longer gaps between new models being unveiled, opening for pre-sale and reaching customers are also lengthening buyers’ waiting times. Daily retail sales averaged about 58,000 in the second week of October, helped by holiday orders, before falling to about 47,000 in the third week. The association expects around 49,000 a day in the fourth week and about 79,000 in the final days of the month as carmakers push to hit month-end numbers.
Full-year outlook cut
Association secretary general Cui Dongshu now expects 2026 retail sales of about 18.5 million, which would be lower than the 2020 trough. Most leading carmakers are cautious about the fourth quarter, with most having reached less than 60% of their annual targets after three quarters, according to the association. The weakness contrasts with the United States, where October sales are forecast to hold near a 16.1 million annual pace. For global carmakers, analysts said, China has shifted from growth engine to battleground, where price wars have eroded profits without reviving demand. The pressure is not limited to traditional cars. New energy vehicle retail sales of about 1.07 million would still leave NEV penetration at 66.9%, just below September’s record of 67.0%, showing that electric and hybrid models now dominate the Chinese market even in a weak month.
Related: October Car Sales Pace Holds at 16.1 Million, Cox Forecasts
