Gasgoo Munich- In the first half of 2026, China's auto market delivered a slightly complex report card.Data from the China Passenger Car Association (CPCA) shows domestic passenger vehicle retail sales totaled 8.7 million units from January to June, down 20.2% year-on-year. Hit by shrinking market volume, most automakers saw sales growth slow in the first half, putting pressure on their annual targets.That is because the era where delivery numbers defined rankings and success is over. As the internal combustion engine (ICE) base rapidly loses speed, overseas policy volatility intensifies, and the industry's average profit margin falls to the 3.4% warning line, the dimension of competition in China's auto market is shifting from "scale involution" to "structural generation gaps."Behind the sales figures, an invisible chasm that truly determines survival has already opened.Sales Landscape Shifts AgainGasgoo analyzed first-half sales for nearly 20 automakers, revealing a clear tiered distribution.SAIC Motor reclaimed the top spot with 2.05 million sales, becoming the only automaker group to break the 2 million mark. Its return to first place was driven by simultaneous gains in self-owned brands, new energy vehicles (NEVs), and exports—a result achieved through painful self-reform.BYD sold 1.81 million vehicles in the first half. Although the domestic market softened, it rode growth in overseas markets to a rebound in June, selling 403,500 units.Geely (1.42 million) and Chery (1.36 million) are accelerating their pursuit from behind, further narrowing the gap with the top two. For this leading quartet, the competition is no longer about how many hit models they sell, but who can spin their supply chain faster and lay down deeper overseas channels.Compared to the top tier's multi-pronged success, the survival of the second tier exposes the cruelest aspect of this elimination race: the growth from NEVs is no longer enough to fill the gap left by the decline of ICE vehicles.Changan Automobile fits this profile. It sold 1.20 million vehicles in the first half, down 17.4% year-on-year. The problem it faces is that its ICE lineup is shrinking faster than its NEV brands can fill the void.GAC Group sold 773,000 units in the first half, up 2.4% year-on-year—a mediocre performance that urgently needs a new breakout point. Perhaps the Qijing brand, built in partnership with Huawei, will be that breakthrough. Great Wall Motor (584,000 units) saw a slight increase of 2.5%, but under the dual pincer attack of rivals' plug-in hybrids and pure electrics, its low NEV mix continues to drag down overall performance.Amid this structural upheaval, the clash between new forces and joint ventures is revealing deeper differences.Most new forces posted impressive growth rates. Leapmotor sold 356,000 units in the first half, surging 65% year-on-year. ZEEKR, NIO, and Harmony Intelligent Mobility Alliance (HIMA) were equally aggressive, with the first two seeing growth exceed 60%. However, brands like Li Auto and XPENG saw sales declines due to insufficient competitiveness in new products.NIO's significant sales breakthrough was mainly due to the mutual support of its three brands: NIO, Onvo, and Firefly. For instance, in an environment where the industry generally relies on price wars to exchange volume, Onvo not only delivered 42,000 units in the first half but also maintained an average transaction price above 240,000 yuan. This achieved a balance between sales growth and price stability, helping NIO substantially improve its fundamentals.Foreign brands, meanwhile, remain under pressure in China. CPCA data shows retail sales for mainstream joint ventures dropped 34% in June. Among them, SAIC Volkswagen shrank by over 30% in the first half, while GAC Honda was cut in half to just 68,000 units. The core challenge for foreign brands in China remains how to break the inertia of decline caused by the shrinking ICE base and achieve scale in the NEV market.Farewell to Universal Growth: NEVs Enter the Stage of Structural CompetitionThere is no denying that NEVs remain the deciding factor for the overall market. This June, the retail penetration rate of domestic NEVs soared to a historic high of 62.8%, while pure ICE vehicles plummeted 42%. But a closer look reveals that the bonus period of universal growth in the NEV market has ended.In the words of CPCA Secretary-General Cui Dongshu, the NEV market is sliding into a polarization of "explosive growth at the high end, pressure at the low end."Data is the most intuitive microscope. In June, wholesale sales of B-segment pure EVs jumped 37% year-on-year, while the A00-segment pure EV market—often entry-level commuter cars—was cut in half, dropping 50%. Consumers are no longer paying just for a green plate or a low price; they are locking their sights on products with higher configurations and stronger intelligent capabilities.In this structural reshaping, resources are accelerating toward the top. In June, only 20 NEV automakers broke the 10,000-unit mark in wholesale sales, yet they held 94% of the market. Among them, self-owned brands took over 60% of the share, new forces took 26%, leaving only 4.3% for mainstream joint ventures.But even within self-owned brands, which hold absolute advantage, differentiation is intensifying.BYD has locked in its leading position with coverage across all price bands. Geely, advancing on both plug-in hybrid and pure electric fronts, saw its NEV volume hit 800,000 units in the first half, with a penetration rate approaching 60%. In contrast, while companies like Chery, Changan, and Great Wall Motor are accelerating their NEV transition, their penetration rates are still hovering around 30%.In the new forces camp, the generation gap in growth often depends on who can bring high-end technology down to the mainstream market.Leapmotor is a typical representative. Its June sales reached 93,000 units, far surpassing Li Auto, XPENG, and NIO. Leapmotor's explosion is essentially due to its full-domain self-research cost control capabilities, which allowed it to build an SUV product matrix in the core market under 200,000 yuan, making intelligence and high configurations accessible. This lethal cost-performance strategy allowed it to expand market share even as the broader market faced pressure at the low end.Unlike Leapmotor, which broke through upward with full-series hits, NIO is achieving technology spillover downward through sub-brands. For example, its Onvo brand relies on NIO's technology and battery-swapping network to bring hardware and software—originally reserved for flagship models like the full-domain 900V high-voltage architecture, self-developed chips, and operating systems—into the 200,000 to 300,000 yuan family vehicle market, addressing range anxiety for pure EV users.In contrast, some automakers like Li Auto and XPENG saw varying degrees of slowdown in first-half growth due to new products being in a replacement window or lacking competitiveness.Market increments are accelerating toward top automakers. Players who can continuously produce hits and build full-lineup matrices are raising their competitive barriers higher and higher.The Competition to Go Global Has Entered the "Deep Water Zone"As the domestic competitive landscape reshapes, overseas markets have become the second growth pole that almost every automaker is fighting for.This June, domestic passenger vehicle exports surged 82.3% year-on-year to 877,000 units, with NEV exports skyrocketing 152.7%. Exports are no longer just a footnote on automakers' financial reports; they have become a key variable influencing the overall market.However, in the second half of the going-global race, the focus of competition has shifted from how many cars are exported to "whether one can establish global operations and risk resilience." In other words, single trade-based exports are entering a downturn, while overseas localized production and global system construction are becoming the invisible chasm that truly creates generation gaps between companies.In this global leap, the divergence among the leaders is already beginning to show.Among the crowd, Chery remains a typical "global harvester" in China. It exported 944,000 units in the first half, achieving high-speed growth of 71.5%. Its export volume ranks first in the domestic auto industry, with overseas sales accounting for nearly 70% of total sales. The channel advantages formed in Latin America, the Middle East, and Russia have built an extremely thick foundation for Chery's survival.Even more noteworthy are players like BYD, which are completing the leap from exporting products to exporting systems. With overseas factories in Thailand and Brazil successively going into production, BYD's overseas sales surged to 789,000 units in the first half, nearly doubling year-on-year. Its overseas sales now account for 40% of total sales. This approach of "building factories in the rival's backyard" is the best way to avoid tariff barriers and achieve localized rooting.At the same time, Geely and Changan are also accelerating their tactical shifts. Geely recorded an export volume of 474,000 units in the first half by accelerating the overseas launch of value series like Galaxy, breaking the 100,000 mark in June alone. Changan drove a 35% increase in exports to 402,000 units through the overseas push of NEV models like Deepal and Qiyuan.As some accelerate, others feel the pressure of defending their turf. SAIC exported 735,000 units in the first half. While it maintained stable shipments relying on the deep cultivation of the MG brand in Europe and Southeast Asia, signs are emerging that it is being overtaken by Chery and BYD in the pace of landing localized overseas production capacity. As competitors' local factories in Europe and Southeast Asia successively start operations, if SAIC cannot quickly upgrade its overseas system dividends, its past first-mover advantage faces the risk of being continuously eroded.In the new forces camp, Leapmotor found a shortcut. By partnering with international giant Stellantis and leveraging the latter's global channel network and production bases, its overseas scale rapidly approached 100,000 units in the first half, successfully walking a path of asset-light, high-efficiency globalization.XPENG is also accelerating its overseas expansion. In the first half, its overseas sales reached 32,000 units, up over 70% year-on-year, with the proportion of total sales rising to about 20%. Chairman and CEO He Xiaopeng has explicitly stated the strategic goal that "half of sales will come from overseas in the next ten years."XPENG attempts to bet its intelligentization advantage directly on the global battlefield through proprietary technology. Currently, this strategy is showing initial results. However, in the current international geopolitical environment, this places extremely high cross-cycle demands on the resilience of the enterprise's overseas supply chain.In particular, demand fluctuations in some Middle Eastern markets this year and the uncertainty of the global trade environment have objectively tested the risk resistance cycles of various automakers. The traditional single-trade model relying solely on domestic production and shipping exports has a relatively short defensive depth when facing overseas policy adjustments.This also means that the focus of competition in the second half of going global is no longer the frequency of shipping logistics, but the construction and landing of overseas localized production capacity.How to Crack the Final Exam of the Second Half?Half-year data is just the process; what the market truly cares about is: can the sales targets set at the beginning of the year actually be met?According to the forecast by Gasgoo Automotive Research Institute, China's passenger vehicle wholesale sales in 2026 will be approximately 29.63 million, a slight year-on-year decrease of 1.4%. The overall market basically marking time means that any growth for an automaker must be snatched from a competitor's mouth. At the end of the first half, the gap in completion rates has already widened.BYD has not publicly announced a specific annual sales figure, but institutions like UBS give predictions around 5 million units. Supporting this massive volume is domestic product coverage across all price bands and the continuous release of overseas production capacity. With the commissioning of factories in Thailand and Brazil, BYD's globalization has upgraded from product export to system export.Among automakers that have announced specific targets, Geely and Chery have higher completion rates, both around 40%, with both having clear sales pillars for support.Geely's NEV penetration rate has broken through 60%, with volume running on both plug-in hybrid and pure electric lines. In the second half, its domestic market will continue to harvest the 100,000 to 200,000 yuan mainstream NEV share with models like the Galaxy E5 and Xingjian 7, and plans to enter the mid-to-high-end track with new products like the Galaxy TT. Overseas, it will use the Galaxy series value cars to enter Europe for volume, and models like the ZEEKR 9X to target the overseas high-end premium market, thereby hedging against domestic involution.Chery's overseas exports shoulder nearly 70% of sales, and channel dividends in markets like Latin America, the Middle East, and Russia are still being released. In the second half, Chery is placing its weight on Europe and emerging markets. It is laying out Europe with the new brand LEPAS and hybrid flagships, and releasing models like the EXEED ET8 in Russia and Central Asia, using a multi-point blooming strategy to maintain lightweight growth throughout the year.In contrast, Changan and Great Wall Motor are the two with lower completion rates. Changan's full-year target is 3.3 million units, with 36% completed in the first half. In the second half, the ramp-up speed of new cars like the Deepal L05, Qiyuan Q06, and Avatr 07 L will directly impact Changan's sales.Great Wall Motor's completion rate is also around 30%. Its Tank series relied on plug-in hybrids to stabilize the hardcore off-road base, but the truly volume-driving Haval brand lacks an absolute hit in the mass NEV market. In the second half, whether models like the all-new Tank 300 and Haval H10 can tear open a breakthrough in the mainstream NEV market is the variable for Great Wall Motor to turn the situation around.SAIC also faces significant pressure to achieve its full-year target of 5 million units. The core highlights for the second half are whether the incremental volume of NEV models like IM and Shangjie Z7 can be released, and whether the decline of the joint venture base can be narrowed.In the new forces camp, the pressure in the second half also shifts to the rapid volume expansion of new product sequences. Leapmotor's full-year target is 1.05 million units, with 30% completed in the first half. To achieve the target in the second half, monthly sales need to be pulled to over 110,000 units. Besides the C-series holding the base under 200,000 yuan, the high-end D-series and Lafa 5 series will become the main attackers for volume.NIO has anchored its full-year growth target at around 40% (approximately 450,000 units), betting more than half of the increase on Onvo. In the second half, as flagship models like the L90, L80, and the new L60 enter their product explosion cycle, Onvo's market performance will directly affect NIO's final results for the year.XPENG and HIMA also have completion rates around 30%. XPENG will rely on the global launch of new series like the MONA L03 and GX to rapidly increase volume in the second half. HIMA needs to rely on new products like the Stelato G9 and Qijing GT7 to drive deliveries.The trajectory of foreign joint venture brands lacks suspense. Caught between the continuous contraction of the ICE base and NEV products that are far from forming scale, the main task for joint venture brands in the second half can only be to slow down the decline as much as possible. Gasgoo Automotive Research Institute predicts Volkswagen China will be around 2 million units for the full year, and Toyota in China around 1.3 million units.Of course, sales targets are just a surface metric. From January to May this year, the profit margin of China's auto industry has fallen to 3.4%. If the second half continues to rely solely on price cuts to chase volume, it will only further overdraw the hematopoietic ability of enterprises to survive in the deep water zone. At this stage, blindly stacking delivery numbers has lost practical significance.The real deciding factor is whether each automaker can solidly transform the product cycles in their hands into a scale explosion backed by quality and cash flow.
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