In an insightful analysis, Cui Dongshu, Secretary-General of the China Passenger Car Association, highlighted that from January to August 2026, the electronics industry, propelled by artificial intelligence, witnessed its profits soar by 110%. Concurrently, the upstream raw materials sector also enjoyed substantial profit growth, significantly bolstering the overall industry profit landscape. Contrastingly, the auto industry grappled with the dual headwinds of escalating costs and lackluster demand, leading to subpar profitability.

Specifically, in August 2026, the auto sector produced 2.7 million vehicles, generating sales revenue of RMB 928.1 billion, marking a 4.2% year-on-year uptick. However, costs surged by 5.3% year-on-year to RMB 831.3 billion, resulting in profits of RMB 37.1 billion, albeit a 24% year-on-year increase. The sales profit margin stood at 4%.

For the period spanning January to August 2026, total auto production reached 20.31 million units, a 3% year-on-year decline. Revenue climbed by 2.9% year-on-year to RMB 7,006.2 billion, while costs rose by 4% year-on-year to RMB 6,237 billion. Consequently, profits plummeted by 16% year-on-year to RMB 253.4 billion, with the sales profit margin settling at 3.6%.

In 2026, various regions actively championed the implementation of the 'Two New' policies, gradually unleashing the vitality of domestic demand. Nevertheless, the auto industry's profitability improvement lagged far behind that of other consumer goods sectors. Amid the national drive to curb excessive internal competition, the auto industry faced intense pressure from upstream cost increases, with pricing challenges becoming increasingly pronounced.

Escalating prices of raw materials such as oil, non-ferrous metals, and semiconductors dampened end-users' willingness to purchase vehicles, continuously mounting operational pressures on automakers. This, in turn, posed a significant impediment to the high-quality development of the auto industry from the upstream sectors.