Chinese car brands could go bankrupt at any time

2 However, there is a serious fragility behind the bright surface of the painting. According to experts, we are entering a difficult period for Chinese manufacturers. 2026 is a candidate to be a year in which “sorting out” will be clearly felt in the industry. Analysts’ expectation is that new car deliveries in China will decrease by approximately 5 percent next year. This will be the sharpest contraction since 2020. Excessive production capacity and the gradual withdrawal of state supports are among the main reasons for this decline. In particular, changes in financial policies have narrowed the room for maneuver for producers. The 10 percent tax exemption applied to electric vehicles will be reduced to 5 percent as of January and will remain at this level until 2028. Moreover, it is not yet clear whether the 20 thousand yuan (approximately $2,900) exchange incentive will continue.

Automobile Magazine – English