CPCA manufacturer forecast team says that, provided policy and the environment
do not change unexpectedly, China’s auto market is likely to bottom and begin to
recover in 2027. They project 2027 domestic retail growth of 0–5% (mean 2%) and
expect market divergence to intensify. The panel attributes the deep 2026
decline to reversible short-term factors—policy front‑loading, oil‑price shocks,
AI‑related cost spillovers and weak consumer demand—and calls the 2026 retail
level of 18.5 mln units abnormally low. For 2027 they flag demand and cost-side
recovery from a vehicle purchase‑tax carryover effect, a strong Lunar New Year,
lower oil prices and easing lithium‑carbonate costs; supply support should come
from reduced destocking and a recovery in the new‑car supply cycle.
