In Beijing, car dealerships are facing unprecedented challenges, with many showrooms empty during what is typically a peak buying season. Salesman Li Ke noted that this autumn is the slowest he has seen in 26 years, with only two to three deals per week compared to the bustling activity of previous years.
The decline in consumer confidence is attributed to an unstable job market and falling property prices, compounded by the government's reduction of incentives for car purchases.
According to the China Passenger Car Association, retail sales of passenger cars in China fell 21.7% year-over-year through September, with projections indicating a 22% drop for the full year, bringing total sales to 18.5 million vehicles. Even the electric vehicle segment, once a growth area, saw a 12.8% decline in sales.
Consumers are now more cautious, prioritizing practicality and economic value over impulse purchases. This shift in consumer sentiment, alongside fierce competition leading to price wars, has prompted Chinese carmakers to look for export opportunities. Analysts express concern that the U.S. and Europe may respond with trade barriers against Chinese car exports.
Despite a 15.5% increase in industrial profits for the first nine months of 2026, the auto manufacturing sector specifically saw profits shrink by 22.8%. In response to these pressures, Li's dealership has relocated to a less expensive area to cut costs, reflecting the broader trend of caution among consumers regarding large purchases