China's domestic car sales under pressure in Jan, NEV sales slide amid policy shifts

China's auto market stumbled at the start of 2026 as adjustments to new energy vehicle (NEV) purchase tax incentives and the rollout of the revamped auto trade-in subsidy program dampened demand.

In January 2026, auto sales in China's domestic market declined 14.8% year-on-year and 33.9% month-on-month to 1.665 million units, according to the data released by the China Association of Automobile Manufacturers (CAAM) One factor behind the weak market performance is the delayed rollout of car purchase subsidies in many regions.