China's car market heads for worst year since 2021 as sales plunge 20%

China's passenger vehicle sales fell 20.2% in H1 2026, prompting the China Passenger Car Association to slash its full-year forecast to a 14% decline—the worst year since 2021. Rising fuel costs, subsidy pullbacks, and soaring battery component prices are crushing both consumer demand and manufacturer margins to 3.4%.

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