At a State Council Information Office press conference held on June 23, Vice Minister of Commerce Sheng Qiuping outlined measures aimed at expanding automotive consumption across the entire value chain. Sheng said China’s vehicle parc has now reached 370 million units, while annual vehicle sales have ranked first globally for 17 consecutive years, cementing the country’s position as the world’s largest automotive market. Automobile retail sales account for about 10% of China’s total retail sales of consumer goods. Main data on total retail sales of consumer goods for may 2026 From an investment and trade perspective, the automotive industry contributes roughly 6% of manufacturing investment. Meanwhile, vehicles and auto parts account for around 6% of the country’s merchandise exports. Notably, the structure of automotive consumption is evolving. The automotive aftermarket ecosystem centered on vehicle usage has already exceeded a trillion-dollar scale globally. International institutions forecast that the Asia-Pacific region will become the world’s largest aftermarket market. More than 50% of passenger vehicles in China are now over seven years old on average, signaling a period of concentrated demand release in the aftermarket sector. Against this backdrop, the Ministry of Commerce and eight other government departments jointly issued the Notice on Measures to Foster and Expand Automotive Aftermarket Consumption on June 23. Overview of recent relevant policies for the automobile industry This Notice introduced 17 specific initiatives covering vehicle modification, motorsports, RV camping, maintenance services, leasing and classic-car activities. At the same time, 40 pilot cities for automotive circulation and consumption reform were launched, covering new-vehicle purchases, used-car transactions, and end-of-life vehicle recycling. Guo Shougang, an official from MIIT, said authorities will accelerate the formulation of a new development plan for the new-energy vehicle industry and advance technological breakthroughs and commercialization in next-generation batteries, automotive-grade semiconductors, operating systems and autonomous driving technologies. To stimulate consumption, the MIIT, Ministry of Commerce and three other departments launched the 2026 New Energy Vehicle Rural Promotion Campaign on June 18. The program includes 155 eligible vehicle models and is accompanied by purchase-tax exemptions and measures to improve charging and battery-swapping infrastructure coverage. Catalog of new energy vehicles eligible for rural subsidy program 2026 Vehicle trade-in incentives continue to play a major role in supporting short-term demand. According to Ministry of Commerce data, China’s consumer goods trade-in program had generated more than RMB 5 trillion ($736.3 billion) in sales as of June 22, benefiting approximately 630 million consumer transactions. Automobiles accounted for roughly 63% of the total sales value generated under the program, making the sector the single largest contributor to consumption growth. Over the past two years, vehicle trade-in policies have encouraged more than 21 million consumers to replace their vehicles, with average subsidies reaching approximately RMB 14,000 ($2,062) per vehicle. On the funding side, a third tranche of RMB 62.5 billion ($9.20 billion) in dedicated trade-in support funds will be allocated before the end of June. Combined with the previously allocated RMB 125 billion ($18.41 billion), policy support continues to intensify. The impact of these measures is increasingly visible in market data. Retail sales of passenger vehicles in China for June, projected by CPCA According to estimates from CPCA, retail sales of passenger vehicles in China are expected to reach about 1.65 million units in June, up 9.3% from May and marking a second consecutive month of month-on-month growth. New-energy vehicle retail sales are projected to reach around 1.05 million units, up 10.5% month-on-month, with penetration remaining at approximately 63.6%. NEV penetration has now stayed above 60% for three consecutive months. CPCA Secretary General Cui Dongshu said continued macroeconomic policy support and a gradual recovery in domestic demand could help stabilize the auto market in the third quarter and return it to a growth trajectory in the fourth quarter. He expects the full-year decline in passenger-vehicle retail sales to narrow to around 11%. Cui also noted that if global oil prices and commodity prices remain stable, easing logistics and consumption cost pressures, consumer confidence in vehicle purchases could improve further, making the market recovery more sustainable.
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