On April 10, the China Association of Automobile Manufacturers (CAAM) released production and sales data for the first quarter of 2026, revealing a stark "ice and fire" contrast between the domestic and overseas markets. Data shows that domestic auto sales in the first quarter reached 4.823 million units, a sharp year-on-year decrease of 20.3%.
Simultaneously, auto exports demonstrated exceptional strength, with cumulative first-quarter exports hitting 2.226 million units, a massive surge of 56.7%. Chen Shihua, Deputy Secretary-General of CAAM, noted that while production and sales recovered significantly month-on-month in March, the domestic market has seen five consecutive months of decline due to the withdrawal of policy incentives and weak internal demand.
In the New Energy Vehicle (NEV) sector, export growth has become the absolute engine driving the industry. In March, China's NEV sales reached 1.252 million units; while domestic sales fell by 18.3% year-on-year, NEV exports reached 371,000 units, a year-on-year increase of 130%. Cumulative NEV exports for the first quarter totaled 954,000 units, more than doubling year-on-year. Cui Dongshu, Secretary-General of the China Passenger Car Association (CPCA), stated that plug-in hybrid models and NEV pickup trucks have become new growth points in overseas markets, and Chinese automakers are accelerating their penetration into the Middle East, Western Europe, and developed Asian nations with high-quality products.
Analysis suggests that the domestic decline is primarily due to the early exhaustion of replacement demand between 2024 and 2025, coupled with the transition of the NEV purchase tax from a full exemption to a 50% reduction. However, energy uncertainties caused by Middle East tensions have prompted countries highly dependent on imported oil and gas, such as Australia, to accelerate their transition from fossil fuels to electricity, providing a strategic window for Chinese brands. BYD (比亚迪) Chairman Wang Chuanfu revealed that the company's factories in Hungary and Indonesia will officially commence production in April 2026. Currently, overseas sales account for over 60% of Chery’s (奇瑞) total volume, while the overseas share for Great Wall (长城汽车) and BYD (比亚迪) is nearing 50%. UBS predicts that the overseas sales of Chinese automakers will grow by more than 25% this year, which is sufficient to offset the fluctuations in the domestic market.