Chinese Autos: Still Searching for a Bottom – June domestic sales -21% YoY, EV penetration 59%; Export +80% YoY

Research evidence excerpt

Chinese Autos: Still Searching for a Bottom – June domestic sales -21% YoY, EV penetration 59%; Export +80% YoY

16 July 2026

Asian Autos

Chinese Autos: Still Searching for a Bottom — June domestic sales

-21% YoY, EV penetration 59%; Export +80% YoY

China auto wholesale -5.3% YoY in June, with domestic retail volume -21.4% and Eunice Lee, CFA

+852 2123 2606 export +80.2%. China's domestic auto demand remains subdued, leaving exports to help

eunice.lee@bernsteinsg.com sustain industry production. We track mandatory first-time auto insurance volumes in China,

which we believe gives the most accurate read on retail sell-through. June retail passenger

Ethan Xu vehicle sales totaled 1.71mn units, -21.4% yoy. The June retail SAAR of 20.7mn units is

+852 2123 2634

ethan.xu@bernsteinsg.com trending higher than 19.2 mn in May 2026, but still below our estimate of normalized annual

demand of c.22mn units. June weakness continued to reflect the pull-forward effect from the

2024-25 subsidy programs (which we estimate shifted over 5mn units of demand), coupled

with a high base. Barring further policy stimulus, we see limited catalysts for a meaningful

recovery in domestic demand before November–December, when base effects are expected

to normalize.(Links to monthly sales volume trackers: PV Wholesale, and PV Retail.)

Letting the market reset. At current levels, we remain relatively cautious on the

likelihood of further major policy support from the Chinese government that would

meaningfully boost auto demand. While domestic demand remains weak, resilient exports

continue to cushion overall industry production, taking off some of the pressure for a quick

demand recovery. We may see incremental measures, such as additional funding for trade-