Most Chinese Auto Dealers Miss First-Half Sales Targets Amid Fierce Competition(Yicai) July 7 -- Only 12 percent of Chinese car dealerships met their sales targets in the first half of this year, highlighting the mounting pressure facing the world's largest auto market amid intensifying competition.
The industry's financial health has also worsened. The proportion of profitable dealerships in China fell to less than 24 percent in 2025 from over 39 percent a year earlier, according to the results of the latest survey by the China Automobile Dealers Association. About a fifth of dealerships broke even, while more than half operated at a loss.
"The past two years have been extremely difficult for auto dealers," Wen Sijing, deputy secretary-general of the CADA, said at the 2026 China Auto Dealers Development Forum. “New car prices are upside down, inventory pressure is enormous, capital is tied up, and rent, labor, and operating costs remain high. On top of that, automakers' performance assessment targets have added even more pressure.”
The difficult operating environment is forcing dealers to take drastic measures. Yicai has learned that a major auto retail group recently notified employees that, after posting heavy losses in the second quarter, it will suspend July salaries for managers and above, while headquarters staff below the manager level will receive 70 percent of their normal pay.
The notice said the retailer's second-quarter losses were so severe that its investors could no longer support payroll by relying on borrowed funds.
To adapt, auto dealers are accelerating their transformation, industry insiders said. Large dealership groups have increased the share of their new energy vehicle outlets to exceed 40 percent while closing underperforming dealerships for traditional fuel vehicle brands. They are also shifting from relying primarily on new-car sales toward diversified revenue streams, including after-sales services, customer relationship management, and comprehensive used-car businesses. Loss-making dealer groups, by contrast, remain overly dependent on new-car sales.
Editor: Emmi Laine
