China

• Reuters

• Published On Mar 11, 2026 at 02:09 PM IST

Domestic sales dropped 34% to 950,000 vehicles, while exports surged 58% to 590,000, partially offsetting the decline.

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China’s wholesale auto sales tumbled 15 per cent in February, hurt by fewer business days in the month due to Lunar New Year holidays, as ‌well as ⁠the ⁠end of a tax break and lower government subsidies for electric vehicles.

Sales at home plunged 34 per cent to 950,000 vehicles, though the overall total was helped by a 58 per cent surge in exports to 590,000, data from the China Association of Automobile Manufacturers showed on Wednesday.

The US-Israeli war on Iran, however, has clouded the outlook for exports. The Middle East accounted for around a fifth of ⁠China’s vehicle ‌exports last year.

“We’re concerned that ‘export’ data won’t very good in March,” said Chen Shihua, a senior official at the association.

Shifts ⁠in the timing of China’s Lunar New Year holidays each year add volatility to industry and economic data. This year, there were three fewer business days in February compared to last year.

Over January and February combined, sales at home were down 26 per cent, while exports climbed 54 per cent.

Automakers in China face a number of headwinds.

This includes the end of a tax break for electric vehicles as well as ‌lower government subsidies for trading in budget greener models. Domestic sales of electric and plug-in hybrid cars plunged 30 per cent in the first two months of the ⁠year, compared with a 17.7 per cent gain for 2025.

Automakers are also reeling from the effects of a long brutal price war, though they are pulling away from price cuts under pressure from authorities.

That said, car makers and dealerships are now having to grapple with elevated inventories. Unsold cars totalled 3.57 million at the end of January, up from 580,000 a year earlier, according to the China Passenger Car Association.