China records drop in car sales

A key part of China’s economy is tanking and the superpower has charged Australia with picking up the pieces.

Chinese carmakers hoping for a strong end to the year have been disappointed by sales falling for two months in a row, with November representing the worst sales drop of the last 10 months.

Companies such as BYD sold fewer cars in China in November 2025 than they did in 2024, putting increased pressure on sales performance in export markets such as Australia.

Experts suggest sales in China will soften further next year as the government winds back sales incentives that have turbocharged the market.

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Chinese-made cars are seen before being loaded onto a ship at the port in Lianyungang, in China’s eastern Jiangsu province on June 20, 2025. (Photo by AFP) / China OUT

Bloomberg reports that the final months of sales incentives this year were expected to boost sales in late 2025, but that has not eventuated.

China Passenger Car Association Secretary-General Cui Dongshu said year-on-year sales dropped by 8.1 per cent.

“This is a relatively rare situation,” he said.

“Usually the trend at the end of the year is that the car market should get stronger and stronger from October.

“But the retail sales in November compared to previous years is unusual.”

More than 11 million people in China have applied for tax breaks and trade-in subsidies that end on December 31.

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People look at a Chinese-made BYD Seal at the Japan Mobility Show in Tokyo on October 31, 2025. (Photo by GREG BAKER / AFP)

Speaking to shareholders, BYD chair Wang Chengfu said the brand will improve sales with fresh tech in 2026, saying that there are “major technological announcements coming, but I can’t disclose details at this time”.

Chinese vehicle exports to markets such as Australia fell by 1 per cent from October to November, with the industry recording 818,000 shipped overseas last month.

Australia’s FCAI reports that almost one in five new cars imported came from China in November, with 18,616 of 97,037 imported vehicles hailing from brands such as MG, BYD and GWM.

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2024 Chery Tiggo 4. Photo: Supplied

China is on track to overtake Thailand in 2026 as Australia’s second-largest source of new cars, ranking only behind China.

Automotive analyst Mike Costello wrote on LinkedIn that although Chinese car brands make headlines with electric vehicles, Australian customers are equally drawn to the prospect of affordable petrol models.

“Four-in-10 small SUVs sold here are Chinese,” he said.

“Customers are drawn to the value-for-money. The cut-price Chery Tiggo 4 was the fourth top-selling car overall in November, for example, and all three were in the overall top 20 models list.”

Originally published as China records drop in car sales