To understand why China is desperate to ship cars overseas, visit a dealership in Beijing.
Fall is traditionally the peak time for buying vehicles in the country, but this year many showrooms are empty or closed.
Car salesman Li Ke said that apart from the Covid-19 pandemic, the 2026 season of “Golden September and Silver October”, as it is called, is the slowest he has seen in his 26 years of work.
“In the past few years, customers were coming to the showrooms all the time,” he told CNBC in an interview in his deserted showroom in a dealership complex on the outskirts of the Chinese capital. “We would have deals to sign every day. But today we only see two to three a week. That’s a dramatic drop.”
Many people in China are not buying cars because an unstable job market and continued declines in property prices have undermined consumer confidence. The government has also cut incentives such as scrappage subsidies and tax breaks for going electric, car sellers said.
China’s 2026 passenger car retail sales totaled 13.33 million units through September, down 21.7% from last year, according to the China Passenger Car Association. For all of 2026, retail sales of passenger cars in China are expected to fall 22% to 18.5 million vehicles, the association said, below the level recorded in the first year of the pandemic.
Even electric vehicles, which were once a bright spot, are in decline. Sales of gasoline cars declined in China due to the country’s transition to electric vehicles, but China’s sales of new energy vehicles – which include electric vehicles – fell 12.8% from January to September, according to the association.
“Customers are watching every penny,” Li said. “When they look at all the new features in all these new models, they are evaluating what is most practical, most economical and worth their money in the long run. We don’t see impulse buying. Because of the bad economy, people are taking longer to replace their cars.”
Fierce competition has led to bruising price wars in recent years, a key reason why Chinese automakers are looking overseas and why Beijing fears partners like the United States and Europe will erect coordinated trade barriers against its massive car exports, analysts say.
Industrial profits for 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 auto industry in particular, profits from January to September were down 22.8% compared to last year.
To preserve cash flow, Li’s dealership moved from an expensive streetside space to one with less foot traffic but that rents at a fraction of the price.
With profit margins eroding, Li said he saw no point in offering further discounts. According to him, the main obstacle lies in the prevailing attitude of Chinese consumers towards expensive purchases.
“Chinese buyers prefer to wait,” he said.
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