Sales rose 1.5% from September, but October is traditionally a peak season for the market. The association said weaker demand from first-time buyers, higher oil prices and subdued consumption weighed on sales.

New-energy vehicles (NEVs), including electric cars and plug-in hybrids, made up 67.5% of passenger-car sales. Yet NEV retail sales fell 13.7% year over year to 1.11 million units. China’s NEV exports more than doubled from a year earlier, CPCA data showed.

Automakers have increasingly looked overseas to offset slowing domestic demand. Tesla exported 59,012 vehicles made at its Shanghai plant in October and sold 67,829 units.

CPCA Secretary General Cui Dongshu said Chinese car-export growth is expected to slow to 10% next year after rapid expansion this year. He said the outlook will depend on recovery in the Middle East market. The association described November as typically a slow month and said a sales recovery would hinge on improving consumer confidence.

Nomura analysts said automakers face additional battery consumption taxes, lower export rebates starting in April 2027, rising material costs and tougher export requirements. Those pressures could squeeze profitability as domestic demand remains weak. The firm said the industry is entering a “knockout stage,” with further consolidation and cooperation increasingly necessary to restore sentiment.