China Auto Industry Profit Margin Falls to 3.8% in First Half of 2026

The profit margin of China's automobile manufacturing industry has been declining over the past decade, falling from 7.8% in 2017 to 4.1% in 2025, and further to 3.4% in the first five months of 2026. According to data from the China Association of Automobile Manufacturers, the profit margin for complete vehicle manufacturing was only 1.5% in the first five months of 2026. During the same period, the average revenue per vehicle across the industry chain was approximately RMB 343,000, up 5.8% year on year; the average cost per vehicle was RMB 305,000, up 6.7%; taxes and fees per vehicle were RMB 27,000, up 7.3%; and gross profit per vehicle was RMB 12,000, down 16.2%.

From January to May 2026, automobile production reached 12.28 million units, down 5% year on year; industry revenue was RMB 4.21 trillion, up 1.4%; costs were RMB 3.74 trillion, up 2.3%; profits were RMB 144 billion, down 20%; and the industry profit margin was 3.4%. In comparison, the average profit margin for downstream industrial enterprises was 6.1%. From January to June 2026, automobile production reached 15.10 million units, down 4% year on year; industry revenue was RMB 5.1893 trillion, up 1.8%; costs were RMB 4.61 trillion, up 2.8%; profits were RMB 195.4 billion, down 20%; and the industry profit margin was 3.8%, lower than the 6.5% average for downstream industrial enterprises.

Looking at the main financial indicators of industrial enterprises above a designated size, the total profit of the automobile industry fell 19.8% year on year in the first five months of 2026, while the mining support activities industry saw a profit increase of 162.6%, the chemical fiber manufacturing industry rose 136.9%, and the non-ferrous metal smelting and rolling industry grew 117.1%.

In terms of sales, market concentration has further increased. In the first half of 2026, the top ten automakers by sales volume sold a total of 12.649 million vehicles, accounting for 84.2% of total sales. SAIC Motor ranked first with 2.045 million vehicles, followed by BYD and Geely Automobile in second and third places. The market share of domestic brands continued to expand, reaching 64.7% in the first half of 2026, with June alone hitting 68.7%, while the combined market share of other joint-venture brands was less than 40%.