China’s passenger car exports surge in October as domestic demand remains weak

HONG KONG (AP) — China’s car exports remained strong in October as growing overseas shipments helped offset persistently sluggish domestic demand in the world’s largest auto market.

China exported about 927,000 passenger vehicles last month, up 62.3% from a year earlier, the China Association of Automobile Manufacturers said Wednesday. Demand for electric vehicles and hybrids drove the growth.

However, domestic demand continued to be weak , with passenger vehicle sales declining 27.4%, to about 1.7 million units, compared with October 2025.

From January to October, China exported more than 8 million passenger vehicles, compared with 4.8 million in the same period in 2025, according to the association. Domestic passenger car sales fell to 14.5 million from 19.4 million in the same period last year.

Domestic car sales have fallen for months as cuts to some government subsidies for buyers and growing economic uncertainty have dampened demand. A fierce price war, intense competition and excess supply have also prompted automakers to step up their overseas push .

China’s domestic retail car sales could total about 18.5 million vehicles in 2026, the lowest level in years, according to Cui Dongshu, of the China Passenger Car Association.

But car exports could exceed 10 million, according to Cui and other auto analysts. Markets including Europe, Latin America , the Middle East and Southeast Asia are among those where Chinese carmakers are expanding.

“Exports are becoming a central growth driver for some Chinese automakers as domestic demand remains weak,” said Chris Liu, a Shanghai-based senior analyst at the technology research and advisory group Omdia.

Chinese automakers, however, face growing export challenges, including protectionist measures. The European Union, under mounting pressure to reduce its huge trade deficit with China, recently reached a deal with Beijing to curb Chinese hybrid vehicle exports over the next few years.

Europe is China’s largest auto export market, accounting for roughly 20% of its passenger vehicle exports, according to S&P Global Ratings.

China’s planned reduction in export tax rebates starting next April is also likely to raise some export costs and squeeze automakers’ profits.

To reduce risks, Chinese automakers have been expanding production overseas to replace some direct exports, including by setting up plants in Brazil and Hungary. S&P analysts say that shift could also weigh on China’s auto export figures in the months ahead.