Vehicle spending by Chinese consumers plunged 12.6 per cent year on year in the first half of 2026, the sharpest decline among all consumer goods, as reduced subsidies and a purchase tax on new-energy vehicles hit demand, reported Caixin.

Data from the National Bureau of Statistics showed spending fell to CNY1.97 trillion (US$290 billion) in the first six months, with the sector's share of total retail sales shrinking to 7.9 per cent from around 10 per cent in recent years. Domestic auto sales dropped 21.1 per cent to about 9.9 million units, according to the China Association of Automobile Manufacturers.

The contraction highlights strain on the world's largest auto market as Beijing shifts policy focus from subsidising purchases to developing the automotive aftermarket.