Chinese vehicle spending drops 12.6% in H1 2026 as subsidies fade, impacting auto sales and market dynamics.
Vehicle spending by Chinese consumers plunged 12.6 per cent year on year in the first half of 2026, marking the sharpest decline among all consumer goods. This downturn is attributed to reduced subsidies and a purchase tax on new-energy vehicles, as reported by Caixin.
Data from the National Bureau of Statistics revealed that spending fell to CNY1.97 trillion (US$290 billion) in the first six months. Consequently, the sector's share of total retail sales shrank to 7.9 per cent, down from around 10 per cent in recent years. Domestic auto sales also experienced a significant drop of 21.1 per cent, totaling approximately 9.9 million units, according to the China Association of Automobile Manufacturers.
This contraction highlights the strain on the world's largest auto market as Beijing shifts its policy focus from subsidizing purchases to developing the automotive aftermarket.
