Chinese car manufacturers on Monday significantly lowered their annual forecast following a further decline in sales.
The industry association PCA now expects sales figures to fall by 11% in 2026.
Previously, it had predicted a decline of 1%. In May, sales slumped by an annual 22.1% to 1.5 million vehicles, the China Passenger Car Association reported in Beijing.
Sales of combustion-engine vehicles plummeted by as much as 39%. Propulsion systems known in China as New Energy Vehicles (NEVs), such as pure electric cars and hybrid drives, recorded a decline of 7.5%.
The industry association cited the impact of high oil prices on customer demand and the sector’s entire supply chain as the reason for the deteriorating outlook. The rise in oil prices due to the war in Iran had already been reflected in sales figures the previous month.
According to the industry association, exports rose by 75.1% in May, but that did not offset the slump in domestic business.
PCA Secretary-General Cui Dongshu remains cautiously optimistic, however.
"In the third quarter, the overall market should gradually improve and return to growth in the final quarter," he said.
Demand remains robust in the export market for electric cars. At BYD, for example, total vehicle sales rose in May for the first time in nine months, and Nio reported a significant increase in sales.
The US electric car manufacturer Tesla also sold more cars manufactured in China than in the same period last year.
