Major Chinese carmakers have announced ambitious sales targets that signal double-digit growth, pinning their hopes on overseas expansion and rapid gains in new energy vehicles. However, industry bodies and analysts remain cautious, warning that policy rollbacks, softening demand, and accelerating industry consolidation could leave sales flat or even in decline.
So far, 11 automakers have announced sales targets for 2026 totaling 23.8 million units, up from a combined 20 million units sold in 2025, implying year-on-year growth of about 19%. The figure excludes BYD, SAIC, GAC and Li Auto, which together sold 11.67 million vehicles last year but have yet to disclose their targets. If these leading manufacturers at least maintain last year’s volumes or deliver modest growth, total sales among top automakers could reach 35.47 million units in 2026, representing an increase of roughly 12%.
However, industry bodies and analysts have offered more conservative forecasts. The China Association of Automobile Manufacturers (CAAM) estimates that total vehicle sales in 2026 will be around 34.75 million units, a year-on-year increase of 1%. UBS predicts that wholesale volume in China will see a low single-digit decline in 2026, while retail sales could fall by mid-single digits.
Automakers Announce Ambitious Goals
On January 14, the CAAM said that China produced 34.531 million cars and sold 34.4 million in 2025, both hit record highs, extending its position as the world’s largest auto market for the 17th consecutive year.
So far, 8 leading automakers—FAW, Geely, Changan, Dongfeng, Chery, Great Wall, Leapmotor, XPeng, Xiaomi, and NIO—have set their 2026 sales targets, totaling 19.58 million units. Among traditional manufacturers, Great Wall Motors has set the most aggressive growth target: 1.8 million units, a nearly 36% increase. In 2025, Great Wall only sold 1.3237 million units.
Dongfeng has also set an aggressive growth target. After selling fewer than 2.5 million vehicles in 2025, the automaker has lifted its 2026 sales goal to 3.25 million units, implying growth of more than 30%.
Two automakers that recently secured L3 autonomous driving licenses have also set ambitious targets. BAIC is aiming to sell 2.2 million vehicles in 2026, a year-on-year increase of 25.57%, while industry media report that Changan has set an internal sales target of 3.3 million units, up 13.3% from the previous year.
Chery is aiming for the 3 million mark, setting a target of 3.2 million units, a 14.03% increase.
In contrast, Geely and FAW have set relatively cautious growth targets. FAW aims for 3.546 million units in 2026, a 7.39% increase from the over 3.3 million units sold in 2025. Geely’s 2026 sales target is 3.45 million units, a 7.66% increase.
New energy vehicle startups are setting particularly aggressive targets. Leapmotor, which delivered 596,600 vehicles in 2025, is aiming for 1 million units in 2026, implying growth of 67.5%. XPeng has reportedly set an internal sales target of 550,000 to 600,000 units, suggesting growth of more than 28%. Xiaomi has targeted 550,000 deliveries, up about 34%, while NIO has adopted a range-based approach, with founder and CEO Li Bin calling for annual sales growth of 40% to 50%.
Analyst Take More Cautious View
CAAM expects total vehicle sales in China in 2026 to exceed 34.75 million units, representing year-on-year growth of just over 1%, including 19 million new energy vehicles and 7.4 million vehicle exports. In contrast, Deutsche Bank and J.P. Morgan forecast a 3% to 5% decline in China’s total vehicle sales next year.
From January 1, 2026, the vehicle purchase tax, which had been fully waived, will be reinstated at a reduced rate of 5%, while subsidies for trade-in and vehicle scrappage programs will also be scaled back.
“Currently, we expect wholesale vehicle sales in China to decline by a low single-digit percentage, while retail sales may fall by mid-single digits,” said Gong Min, head of China Auto Industry Research at UBS Investment Bank.
With domestic market growth slowing, leading automakers are increasingly focusing on overseas expansion. The shift to new energy vehicles is also a key growth driver, with NEV sales targets set significantly higher than overall sales goals.
For instance, Geely has set a 32% growth target for its NEV sales, while Changan aims for 26.2%, underscoring the industry consensus that new energy vehicles are now the primary driver of market growth.
Global challenges persist for electric vehicles. Benchmark Mineral Intelligence, which tracks EV supply chains, reported that worldwide EV sales grew 20% to 20.7 million units in 2025, though growth slowed to its lowest level in nearly two years by year-end. Analysts predict global EV sales growth will ease to 15.7% in 2026, with North America facing a steep 23% decline. Contributing factors include policy shifts in multiple countries and intensified competition in Europe. The EV market is cooling, with the share of consumers open to buying fuel vehicles rising by 12 percentage points in North America, 11 in Europe, and 10 in the Asia-Pacific, while interest in pure EVs is waning across major markets.
Industry Consolidation Is Imminent
Amid policy rollbacks and market pressures, the pace of industry restructuring is picking up.
According to CAAM, in 2025, the top 15 automakers sold a total of 31.741 million new vehicles, a 9.1% increase, slightly below the market growth of 9.4%. The combined market share of these 15 companies was 92.3%, down 0.3 percentage points from the previous year.
Roland Berger’s recent report Predicting 2026 noted that, unlike developed markets where the top 10 automakers (CR10) typically control over 90% of market share, China still has substantial room for consolidation. While the pace of vehicle-maker exits is accelerating, ongoing strategic adjustments and efforts to address weaknesses suggest that this consolidation could become a protracted process.
Roland Berger’s recent report Predicting 2026 noted that, unlike developed markets where the top 10 automakers (CR10) typically control over 90% of market share, China still has substantial room for consolidation. While the pace of vehicle-maker exits is accelerating, ongoing strategic adjustments and efforts to address weaknesses suggest that this consolidation could become a protracted process.
Gong Min cautioned that in recent years, too many automakers were launched for various reasons. While this spurred innovation, advanced technology, and lowered supply chain costs, it also intensified competition, squeezed profitability, and sometimes led to disorderly practices that harmed consumers—making industry consolidation inevitable.
Global consulting firm AlixPartners previously projected that over the next five years, only around 15—roughly 10%—of China’s EV brands would achieve profitability, while those with monthly sales below 1,000 units are likely to exit the market.