At the Intelligent Electric Vehicle Development High-Level Forum (2026) held in Beijing, Xu Changming, a senior economist at the State Information Center, shared insights on automotive market trends. He noted a significant decline in vehicle sales during the first quarter, with domestic demand for passenger vehicles dropping by 22% year-on-year and retail sales falling by 17%. Xu attributed this downturn primarily to consumer hesitation, which he said was not due to policy adjustments but rather delayed implementation of local policies.
Xu expressed confidence that the first-quarter decline would be offset by a recovery in the fourth quarter. He pointed out that last year's fourth quarter also saw a substantial drop, suggesting the overall automotive market this year will stabilize, potentially with a slight decrease.
Regarding the timing of market recovery, Xu cited dealer surveys indicating improving sentiment. According to the data, 9.8% of dealers reported a noticeable rebound in March, 20.7% expected improvement in April, and 35.9% anticipated recovery in May. Overall, 70% of dealers believe the market will rebound in the second quarter. Xu added that his own research shows signs of recovery since late March, though recent oil price fluctuations have caused some variability.
From a supply perspective, Xu highlighted a significant increase in new product launches during the second quarter, with over 60 new models set to debut in April, May, and June, compared to just over 20 in the first quarter. He emphasized that new model releases, combined with promotional efforts by manufacturers, will stimulate market demand. Based on both supply and demand factors, Xu predicts a gradual recovery in the second quarter, with overall market stability remaining the main trend for the year.
Discussing international markets, Xu described them as stabilizing with upward potential. He revealed that for every 100 vehicles sold outside China, 6.5 are Chinese brands, a substantial increase from less than 1 vehicle five years ago, with most growth occurring during the 14th Five-Year Plan period. However, competitiveness varies by market: in mature markets, Chinese vehicles account for 2.9 out of every 100 cars sold, while in emerging markets, the share rises significantly to 13.6 per 100 vehicles.
Xu praised the current performance and reputation of Chinese vehicles internationally but identified after-sales service as a potential risk. He noted that many vehicles are exported as used or zero-kilometer used cars, raising concerns about service network support abroad. Xu concluded that maintaining strong after-sales service is crucial for sustaining positive reputation and enhancing export competitiveness.
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