Cui Dongshu, Secretary-General of the Passenger Car Market Information Joint Branch of the China Automobile Dealers Association, published an article stating that in the first three quarters of this year, the economy operated generally steadily and high-quality development achieved new results. China's consumer market development quality continued to improve, and new consumption formats and models showed vigorous vitality. Under the impact of high international oil prices, traditional automobile consumption faced considerable pressure.
From January to September 2026, fixed asset investment in the automobile industry fell 6.3% year-on-year, still higher than the average level of -7.2% across all industries. In the first nine months of 2026, the capacity utilization rate of the automobile industry was 69%, down 4.2 percentage points from a year earlier. In the third quarter of 2026, the capacity utilization rate of the automobile industry was 66.2%, down 7.1 percentage points year-on-year.
In September this year, the value-added of industrial enterprises above designated size grew 5.5% year-on-year in real terms, with the automobile industry's value-added up 6.7% in September. Demand began to weaken in September last year, but industrial value-added lagged by two months, and this year's pressure is beginning to show. From January to September, the value-added of industrial enterprises above designated size rose 5.3% year-on-year, while automobile industry production grew 7.3%.
In September 2026, automobile production reached 3.06 million units, down 6% year-on-year; new energy vehicle production reached 1.87 million units, up 17% year-on-year, with a penetration rate of 61%; fuel vehicle production was 1.19 million units, down 28% year-on-year. From January to September 2026, automobile production totaled 23.37 million units, down 4% year-on-year; new energy vehicle production reached 12.46 million units, up 12% year-on-year, with a penetration rate of 53%; fuel vehicle production was 10.92 million units, down 17% year-on-year.
In the first nine months of this year, total retail sales of consumer goods reached 37.0001 trillion yuan, up 1.1% year-on-year. Among this, automobile consumption amounted to 2.9427 trillion yuan, down 15% year-on-year; retail sales excluding automobiles reached 34.0574 trillion yuan, up 2.8%. In September, total retail sales of consumer goods reached 4.2433 trillion yuan, up 1.1% year-on-year. Among this, automobile consumption was 364.1 billion yuan, down 21% year-on-year; retail sales excluding automobiles reached 3.8792 trillion yuan, up 3.9%.
Automobile consumption in 2026 presents a complex situation of "policy continuity, market differentiation, and demand under pressure." The trade-in policy continues to exert force, but constrained by factors such as the accelerated shrinkage of fuel vehicles, price wars diluting consumer confidence, and a sluggish low-end market, total retail volume is still declining. The steady growth of petroleum product consumption reflects that residents' travel demand remains rigid, and the weakness in automobile consumption points more to a marginal weakening of willingness to consume durable goods and disposable income.
Since the passenger car subsidy under the trade-in policy in 2026 is far lower than that for commercial vehicles, commercial vehicle subsidies have driven new energy retail growth particularly well, while new energy passenger cars have plummeted. Currently, entry-level passenger car consumption is under great pressure, while China's high-end automobile consumption is too strong and the penetration level is too low. It is hoped that long-term and powerful follow-up policies can be introduced in the future, such as reducing personal income tax for car buyers, promoting new energy vehicles in rural areas, establishing standards for economy electric vehicles, optimizing C7 economy electric vehicle driver's license applications, giving greater purchase tax concessions for compliant pure electric vehicles with a range below 200 kilometers, and encouraging car purchases related to marriage and childbirth, to boost car purchase consumption and promote economic growth.
1. Automobile consumption is declining relatively steadily
Since the property market declined in 2021, automobile consumption rose from 3.94 trillion yuan in 2020 to 5.03 trillion yuan in 2024, breaking away from the passive situation of hovering around 3.9 trillion yuan for three consecutive years from 2018 to 2020. As the property market decline benefits consumption, the problem of home purchases and investment squeezing consumption has improved, and the problem of weak consumption has slightly improved. From January to September 2026, automobile consumption fell 14.9% year-on-year, and in September it fell 21.2% year-on-year. After the base was continuously raised, this year's pullback has been relatively large. The high base pressure in March, June, and September 2025 was the greatest, and under the base pressure in September, automobile retail trends faced considerable pressure, with high oil prices delivering a severe consumption shock.
2. Automobile production trend in 2026 is relatively weak
By product, in September, among 626 products of industrial enterprises above designated size, 271 products saw year-on-year output growth. Among them, automobiles totaled 3.063 million units, down 5.7%, including 1.87 million new energy vehicles, up 16.9%; electricity generation was 829.4 billion kilowatt-hours, down 1.2%; crude oil processing volume was 57.48 million tons, down 8.4%.
3. Automobile value-added performed relatively well in 2026
In 2020, automobile industry value-added grew 6.6%; in 2021, growth hovered at 5.5%; in 2022, automobile value-added was 6.3%, relatively strong; in 2023, automobile industry value-added rose 13%, achieving super-strong growth; in 2024, the 9.1% automobile value-added was a relatively good improvement; in 2025, automobile industry value-added rose 11.5%. In September, the value-added of industrial enterprises above designated size grew 5.5% year-on-year in real terms, with the automobile industry's value-added up 6.7% in September. Demand began to weaken in September last year, but industrial value-added lagged by two months, and this year's pressure is beginning to show. From January to September, the value-added of industrial enterprises above designated size rose 5.3% year-on-year, while automobile industry production grew 7.3%.
4. Automobile capacity utilization rate is relatively stable
From 2020 to 2024, the national industrial capacity utilization rate remained within a small fluctuation range of 72.4% to 74.6%. In the fourth quarter of 2024, the capacity utilization rate of industrial enterprises above designated size nationwide was 76.2%, up 0.3 percentage points from the same period of the previous year and up 1.1 percentage points from the third quarter. In 2025, the national capacity utilization rate of industrial enterprises above designated size was 74.4%. By major industry, the capacity utilization rate of the automobile industry in 2025 was 73.2%, at a relatively low level. From January to September 2026, the capacity utilization rate of the automobile industry was 69%, down 4.2 percentage points from a year earlier. In the first quarter of 2026, the capacity utilization rate of the automobile industry was 70.3%, down 1.6 percentage points year-on-year; in the second quarter of 2026, it was 70.8%, down 0.5 percentage points year-on-year; in the third quarter of 2026, it was 66.2%, down 7.1 percentage points year-on-year.
5. Specific situation of automobile production
In September 2026, average daily new energy vehicle production was 62,000 units, up 16.9% year-on-year. Due to the high base for new energy passenger cars last year, production fluctuated considerably this year. In 2025, new energy vehicle production performed well in small and mini electric vehicles, and demand was also stronger in the low- and mid-end segments, so sales value growth was slightly lower than sales volume growth. This year, the sharp reduction in subsidies had a major impact on small and mini vehicles, but commercial vehicle subsidies were high, and the new energy commercial vehicle market surged. By product, in September 2026, average daily automobile production was 102,000 units, down 5.7%. Considering the higher base from January to September 2025 and the contraction of policy subsidies in 2026, the growth performance from January to September this year was relatively weak. In 2022, automobile production was 27.48 million units, up 3% year-on-year; new energy vehicle production was 7.22 million, up 98% year-on-year, with a penetration rate of 26%; fuel vehicle production was 20.26 million units, down 11% year-on-year. In 2023, automobile production was 30.11 million units, up 9% year-on-year; new energy vehicle production was 9.44 million units, up 30% year-on-year, with a penetration rate of 31%; fuel vehicle production was 20.67 million units, up 2% year-on-year. In 2024, automobile production was 31.56 million units, up 5% year-on-year; new energy vehicle production was 13.17 million units, up 39% year-on-year, with a penetration rate of 42%; fuel vehicle production was 18.39 million units, down 11% year-on-year. In 2025, automobile production was 34.78 million units, up 10% year-on-year; new energy vehicle production was 16.52 million units, up 25% year-on-year, with a penetration rate of 48%; fuel vehicle production was 18.25 million units, down 1% year-on-year. From January to September 2026, automobile production was 23.37 million units, down 4% year-on-year; new energy vehicle production was 12.46 million units, up 12% year-on-year, with a penetration rate of 53%; fuel vehicle production was 10.92 million units, down 17% year-on-year. In September 2026, automobile production was 3.06 million units, down 6% year-on-year; new energy vehicle production was 1.87 million units, up 17% year-on-year, with a penetration rate of 61%; fuel vehicle production was 1.19 million units, down 28% year-on-year.
6. Automobile investment continued to decline in 2026
From January to September, national fixed asset investment (excluding rural households) was 33.4115 trillion yuan, down 7.2% year-on-year. By industry, investment in the primary industry was 652.7 billion yuan, down 3.9% year-on-year; investment in the secondary industry was 12.9743 trillion yuan, down 2.7%; investment in the tertiary industry was 19.7845 trillion yuan, down 10.0%. The greatest investment pressure was in the tertiary industry, with public infrastructure, education, culture, and health investment falling sharply. From January to September 2026, fixed asset investment in the automobile industry fell 6.3% year-on-year, still higher than the average level of -7.2% across all industries.
7. The problem of real estate squeezing consumption has slightly improved
From January to September, national real estate development investment was 5.3364 trillion yuan, down 20.6% year-on-year; from January to September, the sales area of newly built commercial housing was 564.83 million square meters, down 13.2% year-on-year, of which residential sales area fell 13.8%. The sales value of newly built commercial housing was 5.3799 trillion yuan, down 13.9%, of which residential sales value fell 13.7%. In 2021, land transfer revenue was 8.7051 trillion yuan, accounting for 48% of real estate sales; in 2023, land transfer revenue was 5.7996 trillion yuan, accounting for 50% of real estate sales; in 2024, land transfer revenue was 4.8699 trillion yuan, accounting for 50% of home sales revenue. Real estate makes a huge contribution to local finance. In 2025, land sale revenue data still accounted for 49% of housing prices. At present, the relationship between automobile sales and real estate sales from January to September 2026 is 28 square meters of housing per car, and the unreasonable comparison in sales volume has improved somewhat. Although it has improved from the peak of 70 square meters of housing per car in 2020, the earlier debt pressure and the current property market with an average price of 10,000 yuan per square meter still exert strong pressure on consumption, causing auto market demand to remain sluggish due to debt pressure. The wealth effect of the property market has a certain boosting effect on high-end car demand. Recently, the decline in residents' property market debt pressure and weakened home purchase demand also bring certain potential benefits for improving auto market consumption.
8. Auto market consumption needs sustained policy support
Since the property market declined in 2021, automobile consumption rose from 3.94 trillion yuan in 2020 to 4.98 trillion yuan in 2025, breaking away from the passive situation of hovering around 3.9 trillion yuan for three consecutive years from 2018 to 2020. As the property market decline reduces consumers' expectations of buying homes and releases consumption potential, it benefits consumption, and the problem of home purchases and investment squeezing consumption has improved. In 2025, total retail sales of consumer goods were 50.1202 trillion yuan, up 3.7% from the previous year. Among this, automobile consumption was 4.9789 trillion yuan, down 2% year-on-year; retail sales excluding automobiles were 45.1413 trillion yuan, up 4.4%. The cost of living rose sharply, food and clothing consumption grew too quickly, and car purchase consumption was severely squeezed by spending on food and clothing. From January to September 2026, auto market consumption fell 15%, and the problem of weak consumption still needs improvement. In the first nine months of this year, total retail sales of consumer goods reached 37.0001 trillion yuan, up 1.1% year-on-year. Among this, automobile consumption amounted to 2.9427 trillion yuan, down 15% year-on-year; retail sales excluding automobiles reached 34.0574 trillion yuan, up 2.8%. In September, total retail sales of consumer goods reached 4.2433 trillion yuan, up 1.1% year-on-year. Among this, automobile consumption was 364.1 billion yuan, down 21% year-on-year; retail sales excluding automobiles reached 3.8792 trillion yuan, up 3.9%. Automobile consumption in 2026 presents a complex situation of "policy continuity, market differentiation, and demand under pressure." The trade-in policy continues to exert force, but constrained by factors such as the accelerated shrinkage of fuel vehicles, price wars diluting consumer confidence, and a sluggish low-end market, total retail volume is still declining. The steady growth of petroleum product consumption reflects that residents' travel demand remains rigid, and the weakness in automobile consumption points more to a marginal weakening of willingness to consume durable goods and disposable income.
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