To understand why China is desperate to send cars abroad, visit a dealership in Beijing.
Autumn is usually the peak time for buying vehicles in the country, but this time of year many showrooms are empty or closed.
Car salesman Li Ke said that apart from the Covid-19 pandemic, the 2026 “golden September and silver October” season, as it is known, is the slowest he has seen in his 26 years of work.
“Last year, customers would come to the showroom non-stop,” he told CNBC during an interview in a quiet showroom at a dealership complex on the outskirts of the Chinese capital. “We used to have deals to sign every day. But now we’re only seeing two to three deals a week. That’s a dramatic drop.”
Many people in China are not buying cars as an unstable job market and falling property prices have hit consumer confidence. The government is also reducing incentives such as cash-for-clunkers subsidies and tax breaks for electricity, car dealers said.
Retail sales of passenger cars for 2026 in China totaled 13.33 million units as of September, down 21.7% from a year ago, according to the China Passenger Car Association. For the full year 2026, China’s domestic passenger car retail sales will fall 22% to 18.5 million vehicles, the association said – in line with the level recorded in the first year of the pandemic.
Electric vehicles, which used to be bright, are going downhill. Gasoline car sales have fallen in China due to the country’s transition to electric vehicles, but sales of new energy vehicles in China – including EVs – fell 12.8% from January to September, according to the association.
“Customers watch every penny,” Li said. “When we see all the new functions in all these new models, they consider what is the most practical, economical and worth the money for the long term. We don’t see impulse buying. Because of the bad economy, people take more time to change their cars”.
Fierce competition has led to bruising price wars in recent years, the main reason China’s automakers have looked overseas and why Beijing fears partners like the U.S. and Europe are putting up coordinated trade barriers against large car exports, analysts say.
Industrial profits in the first nine months of the year rose 15.5% from the same period in 2025, but September showed signs of weakness compared to the previous eight months, according to China’s National Bureau of Statistics. For the special car manufacturing industry, profits from January to September shrank by 22.8% compared to last year.
To conserve cash, Li’s dealer moved out of an expensive roadside space to one with less traffic but one with low rent.
With profits eroding, Li said he sees little point in offering more discounts. He says a bigger obstacle is the attitude of Chinese consumers to big-ticket purchases.
“Chinese buyers prefer to wait,” he said.