China exported 77.5 percent more passenger cars year on year in August. Domestic sales fell by nearly a quarter

China exported 894,000 passenger cars in August, 77.5 percent more year on year. Sales on China’s domestic market in the same month fell by 23.7 percent year on year to 1.55 million vehicles, marking the eleventh consecutive year-on-year decline. Both figures come from a single source, the China Passenger Car Association, and were released at the same time. Reuters ↗

What the breakdown by powertrain shows

More interesting than the contrast itself is its composition. For electric vehicles and plug-in hybrids, which Chinese statistics jointly classify as new-energy vehicles, exports did not grow by three quarters but by 154.7 percent. The year-on-year growth rate was therefore roughly double that of exports overall. At home, the same vehicles accounted for 64.7 percent of sales, a share that the European market is nowhere near reaching, yet their domestic sales fell by 10.1 percent year on year. Sales thus declined even for electric vehicles and plug-in hybrids, although less sharply than in the market as a whole. BYD and Geely Auto both achieved export records in August. Reuters ↗

Why domestic sales are falling

Support for car purchases, which Beijing had provided for several years, was cut back this year. This is not a single flat amount, but a system of rates. When scrapping an old car, the state contributes twelve percent of the price of a new-energy vehicle, up to a maximum of twenty thousand yuan; for a combustion-engine car with an engine capacity of up to two litres, it contributes ten percent, up to a maximum of fifteen thousand. If the old car is sold rather than scrapped, the rates are lower. Ministry of Commerce of the PRC ↗

The South China Morning Post illustrated what this looks like for a specific buyer through the story of a thirty-year-old chef named Wang Wenfei, who had set aside one hundred thousand yuan for a car, equivalent to just under thirteen thousand euros. The subsidy for a new purchase had meanwhile been cut by a third to ten thousand yuan, petrol prices were rising because of the war in the Middle East, and his employer refused to give him a raise. He ultimately postponed the purchase. The newspaper also cites an uncertain labour market and the prolonged crisis in the real-estate market, reasons why Chinese households are postponing major purchases generally, and says these circumstances increase pressure on carmakers to find buyers abroad. South China Morning Post ↗

The coincidence of both figures alone does not prove that falling domestic sales caused export growth. Capacity can also be reduced, and part of the exports has its own reasons, from price to foreign customer networks.

Zero-mileage cars exported as used vehicles

This is linked to a practice that prompted intervention by Chinese regulators. A carmaker or dealer registers a vehicle even though nobody uses it, then sells it abroad under the used-car regime. Industry organisations warned about this because, in their view, such vehicles distort price formation and may not have after-sales service secured. South China Morning Post ↗

Beijing restricted this from the beginning of this year. From 1 January 2026, a vehicle exported under the used-car regime within 180 days of first registration must be accompanied by a manufacturer’s confirmation that after-sales service is secured. The export conditions were therefore tightened, not the way statistics are measured. CarNewsChina ↗

Chinese brands in Europe

Chinese brands are also increasing their share of the European Union market. Between January and April 2026, they accounted for around six percent of new-car registrations, compared with 3.2 percent in the same period a year earlier. Their share therefore almost doubled in a year, despite the countervailing duties the union imposed on imports of Chinese battery electric vehicles. The duties do not apply to plug-in hybrids, which Chinese statistics count in the same group of new-energy vehicles. Euronews ↗

Read also: Tariffs cut Chinese parcels at a Belgian airport by 53 percent. A second charge is due to be added from November

What this does to European industry

Growing competition is part of the broader context in which Volkswagen’s restructuring is taking place. The group’s supervisory board approved a plan called Future Plan 2030 on Thursday, 3 September, which envisages cutting another fifty thousand jobs. Group chief Oliver Blume described it as a “strong signal for the future of the Volkswagen Group”, while Lower Saxony’s premier Olaf Lies said in the same press release that the challenges facing Volkswagen and the German automotive industry are “enormous”, precisely in view of international competition. Volkswagen Group ↗

Together with what the group has announced since the end of 2024, this amounts to roughly one hundred thousand planned cuts. The plants remain open for now. NOS ↗

On Monday, 7 September, the group announced an agreement to take over the plant in Osnabrück, where car production is to be replaced by the manufacture of air-defence systems. NOS ↗

On Tuesday, Audi chief Gernot Döllner confirmed to Bloomberg that the group is also considering the possibility of selling the Italian motorcycle brand Ducati. No decision has yet been made. Reuters ↗

Why a country without its own carmaker is writing about this

Luxembourg daily Luxemburger Wort gave the August figures the headline “China’s automotive flood has spilled across the Moselle” on Tuesday evening and linked them in its annotation, in one sentence, with job cuts at Volkswagen and the fact that Luxembourg suppliers are also trembling. The Moselle is a river that forms part of the border between Luxembourg and Germany. The article itself is locked for non-subscribers, so we rely on the headline and annotation that the newspaper distributes through its channel. Luxemburger Wort ↗

Luxembourg has no carmaker of its own, but it has suppliers linked to German plants. Slovakia is even more deeply embedded in this chain. It has long ranked among the world leaders in cars produced per capita, and its carmakers are all foreign-owned, so decisions made in Wolfsburg or Seoul can also affect Slovak plants and their suppliers.

What comes next

According to Cui Dongshu, secretary general of the association that publishes the figures, Chinese car exports could reach twelve million units this year and eighteen to twenty million by 2030. The forecast should be read with awareness of who is making it — an industry organisation speaking about its own sector, not an independent institute. Kleine Zeitung ↗

For comparison, 10.8 million new passenger cars were registered across the European Union last year. ACEA ↗

The August data therefore show the simultaneous rise in exports and decline in domestic sales. On their own, they do not determine how exports to Europe will develop further.

Photo: Car transporters at the overseas port of Bremerhaven, one of Europe’s largest car transshipment hubs. Author Dietmar Rabich, via Wikimedia Commons, CC BY-SA 4.0. The image has been reduced in size.