China’s vehicle sales dropped 3.2% year-on-year in January 2026, after a 6.2% fall in December 2025, according to data from the China Association of Automobile Manufacturers (CAAM). New energy vehicle (NEV) sales edged up 0.1%, marking the eleventh consecutive monthly increase. Last month, CAAM projected China’s overall passenger vehicle sales would rise 1% year-on-year to reach 34.75 million units in 2026. NEV sales are projected to reach 19 million units in 2026, climbing 15.2% year-on-year. In 2025, China’s vehicle sales grew 9.4% year-on-year to a record high of 34.4 million units, accelerating from 4.5% in the previous year, with NEV sales surging 28.2%.