Cui Dongshu, Secretary-General of the China Passenger Car Association (CPCA), noted that retail sales in the automotive market experienced a month-on-month increase of 5.5% in August 2026, driven by a confluence of factors. The pronounced volatility in global oil prices has driven up the operational costs of fuel-powered vehicles, resulting in a steady decline in consumer demand for such models. In August, the Manufacturing Purchasing Managers' Index (PMI) remained below the expansionary threshold, signaling a sluggish recovery in domestic demand. Auto market orders and customer foot traffic followed a pattern of low activity in the first half of the month and heightened activity in the second half. During the first ten days, customer traffic dipped due to the impact of high-temperature holidays, while the Chengdu Auto Show in the latter part of the month invigorated market enthusiasm. Additionally, a surge in end-of-month sales further spurred retail recovery. Following the implementation of new national safety standards for new energy vehicles, the industry has transitioned from "price competition" to "value competition." Together with policy support aimed at bolstering domestic demand, the current market downturn reflects a temporary structural shift. It is too early to conclude that the industry is heading toward a sustained decline.