Passenger Vehicle Retail Sales in February Down 25.4% Year-over-Year

[Market Volatility] In February 2026, passenger vehicle retail sales totaled 1.034 million units, down 25.4% year-over-year and down 33.1% month-over-month.

Key Data: New Energy Policy Rollback Pressures Domestic Brands

Retail sales of 1.034 million units hit a cyclical low. Cumulative sales for January and February reached 2.578 million units, down 18.9% year-over-year. Retail sales of domestic brands amounted to 630,000 units, with their market share rebounding month-over-month to 61.2%, though still down 30% year-over-year.

Strategic Context: Lunar New Year Disruption Combined with Policy-Induced Demand Pull-Forward

The China Passenger Car Association (CPCA) noted that February sales are historically volatile due to the Lunar New Year holiday, and the 2026 performance ranks "slightly below the historical median." The phase-out of the new energy vehicle purchase tax incentive at the end of 2025 pulled forward demand, disproportionately impacting domestic brands that have a higher reliance on new energy vehicles.

Industry Impact: Widening Gap Between Wholesale and Retail

Wholesale volume in February stood at 1.518 million units, down only 14.3% year-over-year, creating an 11.1 percentage point gap with retail sales growth. This indicates a slowing pace of inventory reduction by manufacturers and persistent pressure on dealership channels.