Cui Dongshu, Secretary General of the China Passenger Car Association (CPCA), released a report on the profit margin of China’s automotive industry for the January-April period of 2026. According to the report, industry revenue for January-April stood at 3.3129 trillion RMB, a slight increase of 1.1% year-on-year; costs reached 2.9404 trillion RMB, up 2%; and profit was only 111.9 billion RMB, a sharp decline of 17%, pushing the industry’s sales profit margin further down to 3.4% — the lowest level for the period on record. Trend of auto industry sales profit margin Historical data shows a continuous downward trend in the automotive industry’s profitability. The report indicated that the sales profit margin was 4.3% in 2024, fell to 4.1% in 2025, and further slid to 3.4% in the first four months of 2026 — three consecutive years of decline. This trend is not a short-term fluctuation. The report points out that on the cost side, lithium carbonate prices have doubled, commodity prices remain high, profit growth in the upstream mining sector is strong, and cost pressures continue to mount for midstream and downstream vehicle manufacturers. Excessive profits in upstream raw materials directly translate into cost pressures for downstream manufacturing. Data shows that across the automotive industry chain from January to April, average revenue per vehicle was 342,000 RMB, up 6.0%; average cost per vehicle was 303,000 RMB, up 6.93%; taxes and fees per vehicle were 27,000 RMB, up 4.7%; and gross profit per vehicle along the chain was 12,000 RMB, down 12.1%. Trend of auto industry gross profit per vehicle At the same time, the sales side also faced headwinds. Vehicle production from January to April totaled 9.7 million units, down 5% year-on-year. Among them, new energy vehicle (NEV) production was 4.29 million units, down 4%, with a penetration rate of 44%; conventional fuel vehicle production was 5.41 million units, down 6%. Auto industry earnings As the benefits of scale diminish, the pressure of fixed cost amortization intensifies, placing a double squeeze on industry profitability. For the January-April period, automotive industry revenue was 3.3129 trillion RMB, up 1.1%; costs were 2.9404 trillion RMB, up 2%; profit was 111.9 billion RMB, down 17%; the industry’s profit margin was 3.4%, still low compared to the average 6.1% profit margin of downstream industrial enterprises. Encouragingly, the single-month profit margin for April rebounded to 3.7%, up from 3.2% in January-March, indicating signs of marginal improvement.
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