Chinese car sales grow worldwide, except in China

The Chinese auto market closed July with the tenth consecutive month of decline in domestic sales, while exports nearly doubled in the same period. The imbalance is already redesigning the global strategies of Toyota, Volkswagen and the Detroit brands, which for decades have treated China as a profit engine.

According to the China Passenger Car Association (CPCA), retail sales of passenger cars fell 20.9% in July compared to the same month in 2025, to 1.46 million units. Compared to June, the drop was 8.8%. From January to July, the Chinese market shrank 20.5%.

In the opposite direction, exports totaled 923 thousand vehicles in the month, an increase of 88%. In the first half of the year, Chinese shipments reached 5.31 million units, 53% higher than a year earlier.

Brazil is the largest destination in the Global

SouthBrazil is at the center of this route. The country received 410,825 Chinese vehicles in the first half of the year, according to CPCA data released by its secretary-general, Cui Dongshu — the second largest volume in the world, behind only Russia, with 448,157 units, and ahead of the United Kingdom (255,260) and Australia (237,823).

The combination of expensive fuel and weak economy explains much of the domestic fall. The CPCA attributed the rise in oil prices to the closure of the Strait of Hormuz, which made the cost of maintaining a combustion car more expensive and accelerated the migration to electric and hybrids. New energy vehicles accounted for 65.1% of total sales in July, although their retail also fell 3.9% to 951 thousand units.

Traditional brands under double

pressureThe squeeze on established manufacturers comes from two sides. Within China, Mercedes-Benz, Volkswagen and BMW lose share in an electric price war waged in a shrinking market. General Motors, which faced the same scenario of heavy investment and falling volume, decided to close Chevrolet’s operations in the country.

Outside of it, the Chinese surplus reaches precisely the markets that supported the margins of these brands. Geely illustrates the turnaround: it shipped about 474 thousand vehicles in the first half of the year, an increase of more than 150% in the annual comparison and a volume already higher than the total for 2025. The target for the year was raised to approximately 920,000 units, an advance that European authorities associate with state support and point to as a trade distortion.

Electric cars do the heavy lifting in this expansion. Chinese automakers exported about 2.4 million electric vehicles in the first half of 2026 alone, a volume close to the total shipped in the entire year of 2025.