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Fitch: CN Passenger Vehicle Retail Sales May Log LSD Growth Next Yr; Export Growth May Slow Evidently
2026-11-05 12:11:52 Fitch Ratings said the strong export momentum of China's auto industry is cushioning the impact of meager domestic demand, but regulatory policy adjustments and weakening profitability will continue to constrain the industry's outlook next year. The rating agency projected China's domestic passenger vehicle retail sales to shrink by about 20% this year, while retail sales may achieve low single-digit growth next year, fostered by product upgrades and replacement cycles as well as concentrated demand ahead of the expiry of tax incentives for NEV purchases. Fitch said that, as the high base effect driven by subsidies last year gradually fades, the decline in domestic passenger vehicle retail deliveries should narrow in 4Q26. However, lower sales target achievement rates and cost inflation will limit automakers' incentive for substantial future promotions. Regarding exports, as the EU may impose import quotas on China-made hybrid vehicles from the end of this year, coupled with China's plan to lower the export VAT rebate rate for NEVs from 13% to 9% starting from Apr 2027, export growth may slow evidently next year. However, demand from emerging markets and the expansion of localized production in Europe will partially offset the impact of these policies. ~ AASTOCKS Financial News Website: www.aastocks.com | |