1. Core data (first quarter/March 2026)

Domestic (down 17.4%): Retail sales of passenger cars in the first quarter were 4.226 million, a year-on-year-17.4%; including new energy-21.1% and fuel vehicles-14%. Exports (up 74.3%): Exports of 695,000 vehicles per month in March,+74.3% year-on-year (the growth rate of new energy vehicles exceeded 120%). Industry profits are extremely low: From January to February, the profit margin of the automobile industry was less than 3%, lower than the industrial average (6%). Most automobile companies "sell cars without making money."

2. Why did the domestic market plummet?

Policies recede: new energy purchase tax is halved, old-for-new subsidies are weakened, and car purchase costs are rising. Demand overdraft + saturation: In the past three years, car purchases have been concentrated, and the redemption cycle has been lengthened; ordinary households have weakened their willingness to buy cars. Sequela of the price war: In successive years of "exchanging price for volume", consumers are holding on to the sidelines, and 84.4% of dealers have prices upside down (selling cars means losing money). Cost pressure: Battery raw materials are rising in price, making it difficult for car companies to reduce prices and make profits.

3. Why did exports surge sharply?

Cost performance: The price of China cars of the same class is 30%-50% lower than that of Europe and the United States, and new energy has greater advantages. Global blank markets: Southeast Asia, the Middle East, Latin America, and Africa have low penetration rates and strong demand. Capacity spillover: Domestic capacity utilization is insufficient, and exports become the only digestion channel. Policy support: export tax rebates, China-Europe/ASEAN trade facilitation, and reduction of sea sailing costs.

4. Current situation of automobile companies: just want to survive

Consensus: He Xiaopeng bluntly said that "automobiles are not a good business model" and the industry has entered a stage where the rest is king. Strategy: Cut costs: lay off employees, close factories, cut non-core projects, and give priority to ensuring cash flow. Exports: BYD, Chery, Chang 'an and other exports account for more than 30%, becoming the core of growth. The price war has slowed down: from "grabbing shares" to "ensuring profits", it is better to sell less than lose money. Differentiation: The top leaders (BYD, Chery, Chang 'an) rely on exports to make profits; the second-tier and below are generally losing money and are on the verge of elimination.

5. Summary in one sentence

Domestic profits are squeezed out, and exports are rushing to survive-2026 is the "turning point of life and death" for China car companies. The key to survival is to control costs, strengthen exports, and maintain cash flow.

1. Core data (first quarter/March 2026)

Domestic (down 17.4%): Retail sales of passenger cars in the first quarter were 4.226 million, a year-on-year-17.4%; including new energy-21.1% and fuel vehicles-14%. Exports (up 74.3%): Exports of 695,000 vehicles per month in March,+74.3% year-on-year (the growth rate of new energy vehicles exceeded 120%). Industry profits are extremely low: From January to February, the profit margin of the automobile industry was less than 3%, lower than the industrial average (6%). Most automobile companies "sell cars without making money."

2. Why did the domestic market plummet

Policies recede: new energy purchase tax is halved, old-for-new subsidies are weakened, and car purchase costs are rising. Demand overdraft and saturation: In the past three years, people have concentrated on buying cars, and the purchase cycle has become longer; ordinary families 'willingness to buy cars has become weaker. Sequela of the price war: In successive years of "exchanging price for volume", consumers are holding on to the sidelines, and 84.4% of dealers have prices upside down (selling cars means losing money). Cost pressure: Battery raw materials are rising in price, making it difficult for car companies to reduce prices and make profits.

3. Why did exports surge sharply

The cost performance ratio is particularly high. The price of China cars of the same class is 30% to 50% lower than that of European and American cars, and the advantages in new energy are even greater. There are blank markets around the world. Places such as Southeast Asia, the Middle East, Latin America, and Africa have relatively low penetration rates, but demand is quite strong. Capacity spillover: Domestic capacity utilization is insufficient, and exports become the only digestion channel. Policy support: export tax rebates, China-Europe and ASEAN trade facilitation, and reducing sea costs.

4. Current situation of automobile companies: just want to survive

Consensus: He Xiaopeng bluntly said that "automobiles are not a good business model" and the industry has entered a stage where the rest is king. Strategies to cut costs: lay off employees, close factories, cut non-core projects, and give priority to ensuring cash flow. Exports: BYD, Chery, Chang 'an and other exports account for more than 30%, becoming the core of growth. The price war has slowed down: from "grabbing shares" to "ensuring profits", it is better to sell less than lose money. Differentiation: The top leaders (BYD, Chery, Chang 'an) rely on exports to make profits; the second-tier and below are generally losing money and are on the verge of elimination.

5. Summary in one sentence

At present, domestic corruption is relatively serious, and profits are being compressed. Don't rely on the domestic market, but rely on exports to survive. 2026 is a "turning point of life and death" for China car companies. The key to survival is to control costs, increase export efforts, and maintain cash flow.

Source: Xiong Yu, digital automobile export

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