China imported about 21,000 vehicles in September, 49% fewer than a year earlier, as the slump in the world’s largest car market hit imported luxury cars hardest and the industry’s main retail tracker forecast a fall of more than a fifth in domestic sales this year.
The China Passenger Car Association (CPCA) expects passenger car retail sales to drop to about 18.5 million vehicles in 2026, from a peak of 23.74 million in 2025, Secretary-General Cui Dongshu said on Monday.
He expects a median rise of 2% in 2027, within a range of zero to 5%, describing it as a “weak recovery after bottoming out.”
Imports nearly halve
The September import figure was also 6% lower than August, according to data Cui published on Sunday.
August imports had already fallen 51% from a year earlier and 48% from July, to about 23,000 vehicles, according to the CPCA’s monthly market report.
Imports in the first nine months totaled about 290,000 vehicles, down 20%. China imported about 480,000 vehicles in all of 2025, a 32% drop, according to Cui’s figures.
Retail sales of imported cars fell 39% to about 29,000 in September and 32% to about 280,000 in the first nine months.
Passenger cars made up more than 99% of imports. Imported conventional hybrids rose about 15% in the first nine months, while fully electric passenger cars fell about 27% and plug-in hybrids about 54%. Cui called imported new energy vehicles weak.
Most imports were gasoline models with engines under 2 liters. Cui said 1.5- to 2-liter models had held up relatively better this year, while 3- to 4-liter models had done better last year.
Japan and Germany dominate
Japan was the largest source in September with 7,399 vehicles, just ahead of Germany with 7,255. Together they supplied about 70% of the month’s imports.
The UK followed with 2,488, Slovakia 1,418, Mexico 818 and the US 791.
The mix swings sharply from month to month. In August, Germany led with 7,393, the US shipped 4,972 and Japan only 2,173, according to the CPCA’s monthly report.
Over the first nine months, Japan supplied 136,652 vehicles, or about 47% of the total, ahead of Germany with 66,438, the US with 28,350, Slovakia with 20,422 and the UK with 18,803.
Thailand, Austria and Mexico posted the largest increases over the period, from small bases.
Luxury buyers pull back
Demand for luxury cars, both imported and locally built, is weak overall, Cui said, with the greatest pressure in traditionally wealthy cities such as Beijing, Shanghai, Hangzhou, Chengdu and Shenzhen.
Seven ultra-luxury brands sold a combined 221 vehicles in China in September, down 49.4%, according to Yicai. Bentley sold 99, down 40%, Ferrari 22, down 48.8%, Lamborghini 21, down 63.8%, and Maserati 17, down 79.5%.
Jaguar sold six cars, against 1,937 a year earlier, the outlet said.
China lowered the threshold for its additional 10% consumption tax on ultra-luxury cars from 1.3 million yuan ($195,000) to 900,000 yuan ($135,000) in July 2025 and extended it to fully electric and fuel cell models.
Luxury brands as a whole, imported and domestic, sold 170,000 cars at retail in September, down 29%, according to the CPCA. Their share of retail sales was 11%, down 0.2 percentage point.
A 22% drop in 2026
The 18.5 million forecast implies a 22% decline from 2025 and would leave the market below 19.29 million in 2020, which Cui described as the previous trough. Retail sales fell 21.7% to 13.33 million in the first nine months, according to the CPCA.
Cui gave both 18.5 million and 18.6 million in the same post.
He blamed a mix of shocks he described as external and reversible. Geopolitical conflict lifted oil prices and hit fuel cars, while demand from artificial intelligence pushed up the cost of memory chips, copper and lithium carbonate, squeezing new energy vehicles.
The end of a purchase tax policy at the end of 2025 pulled demand forward, Cui said, and the marginal effect of China’s trade-in subsidies was fading after the program raised entry standards and cut payouts.
A weak rebound in 2027
Cui said he expected retail to grow by zero to 5% in 2027, with a mean of 2%, provided policy and the broader environment do not change unexpectedly.
He pointed to easing cost pressure, falling oil and lithium carbonate prices, the timing of the Spring Festival holiday, lighter destocking and a recovering cycle of new models.
He warned that the market would “continue to polarize.”
September’s sales
The CPCA’s September report shows how the slump has split the market.
Retail sales fell 28% to 1.618 million in September. Fuel car retail sales dropped 43%, and cars running on gasoline or diesel alone fell 49%, while conventional hybrids rose 25%.
New energy vehicle retail sales fell 16.7% to 1.084 million, lifting their share of retail sales to a record 67%.
Exports filled the gap for carmakers. Passenger car exports rose 73.7% to 917,000 vehicles, or 36% of manufacturers’ sales, compared with 19% a year earlier.
Wholesale volumes fell 8.9% to 2.549 million, a much smaller drop than retail because of the export surge.
The CPCA’s October forecast expects retail sales of about 1.6 million, down 28.9% from a year earlier, with new energy vehicles at about 1.07 million.
Hitting 18.5 million would require about 5.17 million sales from October to December, or about 1.72 million a month.
Retail sales of cars fell 21.2% in September and 14.9% in the first nine months, according to the National Bureau of Statistics data cited by the CPCA.
Profits at Chinese carmakers fell 16% to 253.4 billion yuan ($38 billion) in the first eight months, with a margin of 3.6%, according to the CPCA’s report.
