China Automotive Market Review | January–August 2026
China's automotive market showed a clear divergence in the first eight months of 2026: domestic sales fell, exports grew rapidly, and new energy vehicles accounted for more than half of all new vehicle sales. For polyurethane producers, these shifts come down to a practical question: how many vehicles are Chinese factories building, and how much material do they need for seats, interiors, acoustic insulation, vibration damping, adhesives and coatings?
Passenger vehicles under pressure as commercial vehicles grow
Vehicle production reached 20.255 million units in January–August, while sales totalled 20.315 million, both down 3.8% year on year. Passenger vehicle production was 17.339 million units and sales were 17.373 million, down 5.4% and 5.5%, respectively. Commercial vehicle production rose 7.5% to 2.916 million units, while sales grew 7.2% to 2.942 million. Passenger vehicles accounted for the overall decline, partly offset by growth in commercial vehicles.
Figure 1. China automotive market key indicators, Jan–Aug 2026 | Sources: MIIT / CAAM
In August, vehicle production and sales reached 2.684 million and 2.712 million units, respectively. These were up 4.3% and 4.9% month on month, but still down 4.7% and 5.1% year on year. Domestic sales fell 24.2% year on year to 1.701 million units, while exports rose 65.3% to 1.01 million, exceeding one million for the third consecutive month. Production and sales recovered from July, but domestic sales remained under considerable pressure.
Figure 2. Monthly vehicle sales and YoY changes, Jan–Aug 2026 | Sources: MIIT / CAAM monthly data
New energy vehicles take over half of sales but volumes still matter
New energy vehicle (NEV) production reached 10.668 million units in January–August, and sales totalled 10.650 million, up 10.8% and 10.7% year on year, respectively. NEVs accounted for 52.4% of all new vehicle sales over the period, rising to 60.6% in August. Their share exceeded half on both a cumulative and a monthly basis.
NEV growth supported demand for automotive materials, although it was slower than in previous years. The question now is how far additional NEV sales can offset the decline in combustion-engine vehicles. A rising market share does not, by itself, mean that total vehicle volumes are increasing.
According to the China Association of Automobile Manufacturers (CAAM), Chinese-brand passenger vehicle sales reached approximately 12.747 million units in January–August, up 0.8% year on year. This represented about 73.4% of passenger vehicle sales over the same period. Chinese brands maintained modest growth despite the overall decline in passenger vehicle sales, increasing their influence on demand across the automotive supply chain.
Exports account for a larger share of sales
China exported 7.153 million vehicles in January–August, up 66.7% year on year and equivalent to roughly 35% of total vehicle sales. NEV exports rose 124.3% to 3.435 million units, close to half of total vehicle exports. With domestic sales down 21.8% over the same period, exports provided substantial support for overall sales.
Figure 3. Vehicle sales mix, Jan–Aug 2026: domestic sales and exports | Source: CAAM