Cui Dongshu: The national passenger car industry had an inventory of 3.33 million units at the end of February 2026, a decrease of 240,000 units compared to the previous month.

CryptoTimes Finance APP has learned that on March 21, Cui Dongshu stated that by the end of February 2026, the national passenger car industry inventory will be 3.33 million units, down 240,000 units from the previous month, but up 250,000 units from February 2025, forming a good trend of controlled inventory decline.

The China Passenger Car Association forecast team expected a 5% optimism level in early February 2026, but by the end of February, satisfaction was at 40%, indicating low expectations but improving satisfaction. The team’s optimism for the February market rebounded to 23%, still relatively low compared to recent market optimism levels, with hopes for further subsidy support in some regions.

We estimate future days of inventory supported by monthly retail forecasts N+3, so these are not fixed monthly figures; inventory days will adjust with forecasts. The actual Q4 2025 trend was below expectations, with peak industry inventory days rising to 79 days, followed by significant production cuts. Based on the inventory at the end of February 2026 and future sales estimates, the current inventory supports about 60 days of sales, compared to 62 days in February 2023, 50 days in February 2024, and 64 days in February 2025. Overall, inventory pressure has improved this February.

Analyzing the inventory changes of solely new energy vehicle manufacturers, driven by anti-inflation efforts, industry inventory fell to 620,000 units in September 2025, then rose to 680,000 units in February 2026—10,000 units below the peak in November 2025 but 20,000 units higher than December. Recently, dealer and channel inventories of new energy vehicles face market retail below expectations, exerting significant pressure on overall industry inventory.

1. Recent Trends in Narrow Passenger Car Retail

In February, nationwide passenger car retail sales were 1.034 million units, down 25% year-over-year and 33% month-over-month. Retail growth this February was weak. The negative growth reasons are multifaceted: first, the impact of the Spring Festival; second, stricter policies and reduced subsidies for old-for-new programs; deeper reasons include low consumer purchasing power and willingness.

Since the start of 2023, total retail sales have been 2.578 million units, down 19% year-over-year. Due to complex market factors, recent years show a clear “low at the start, high at the end” annual sales pattern. Since 2020, February retail YoY declines have been common, making the 25% drop in February 2026 a relatively low point in the historical volatility of February growth rates.

2. Recent Trends in Narrow Passenger Car Exports

According to CAAM data, February exports (including complete vehicles and CKD) reached 555,000 units, reinforcing the upward trend seen in 2025 and reflecting sustained overseas competitiveness.

Exports in February increased 56% year-over-year but decreased 4% month-over-month. This year’s growth continues the strong momentum from last year.

3. Recent Trends in Narrow Passenger Car Production

February saw significant production cuts, as market demand lagged behind production increases. Production was 1.37 million units, substantially below historical levels, with a large month-over-month decline, indicating a relatively weak production trend.

February production was 1.37 million units, down 21% YoY and 32% MoM. January-February total production was 3.38 million units, down 12% YoY, with substantial reductions.

4. National Passenger Car Industry Inventory Tracking

By the end of February 2026, national passenger car industry inventory was 3.33 million units, down 240,000 from the previous month, but up 250,000 from February 2025, indicating a controlled downward trend. The 2025 old-for-new policy boosted manufacturer optimism, with higher sales driven by subsidies, leading to cautious production and continuous destocking from May to August. Since October last year, market performance was below expectations, with high inventory in November, but subsequent production adjustments proved effective.

5. Industry Inventory Monitoring

Since 2023, overall industry inventory has remained relatively stable, falling to around 2.97 million units in October 2024, then rising to 3.79 million units in November 2025, before declining again. In February 2026, inventory decreased to 3.33 million units, with manufacturer inventory accounting for 29.8%.

Due to optimistic market expectations earlier, manufacturers maintained high production enthusiasm, making overall inventory pressure somewhat uncontrollable. Currently, manufacturer inventory ratios are high, and as the market enters the post-Lunar New Year recovery phase, channel stocking enthusiasm is gradually improving. However, sales in the coming months will still face significant inventory digestion pressure.

6. Market Forecast Index and Satisfaction Index

We evaluate monthly market performance based on PMI-style indices and assessment results. Internal manufacturer forecasts suggest that since early 2025, the China Passenger Car Association’s team has been increasingly cautious. The early 2026 optimism was at 5%, but by March, satisfaction for February improved to 40%, despite low expectations. The optimism for February rebounded to 23%, still relatively low, with hopes for further subsidy support in some regions.

Given the current inventory level of 3.33 million units and expectations for market growth in the coming months, inventory digestion remains challenging. Due to current promotional price differentiation, automakers need to closely monitor policy and market changes, cautiously set production and sales rhythms, and manage dealer inventory structures carefully, clearing old stock promptly.

7. Overall Characteristics of National Passenger Car Inventory

With the rising share of new energy vehicles, traditional fuel vehicle sales have declined, reducing inventory pressure. Overall, in February 2026, mainstream domestic automakers’ inventory significantly increased compared to year-end, reflecting strong growth intentions for 2025. The safety margin of year-end peak inventories has slightly loosened, with several months exceeding 2 million units.

From a inventory cycle perspective, the inventory buildup starting February 2021 peaked at 3.94 million units in February 2022, then gradually declined to 3.25 million in April 2023, before rising again to 3.92 million in November 2023.

Thanks to substantial government incentives in 2024, inventory levels remained relatively low. However, due to weak market performance in Q4 2024, November inventory rose to 3.79 million units. Recently, the market has declined sharply, especially in the new energy segment, and inventory pressures have not eased significantly.

8. Comparison with U.S. Passenger Car Inventory

U.S. passenger car inventory currently stands at 40-50 days, indicating relatively low inventory pressure, serving as a reference for the Chinese market.

9. Slight Decline in National Passenger Car Inventory Days

As the 2025 market recovers as expected, with strong production, the previous inventory reduction trend changed. Inventory days at the end of April increased significantly, then the industry’s anti-inflation measures helped control inventory. The peak inventory days reached 79 days, then production cuts followed. Based on the inventory and future sales estimates at the end of February 2026, the supported sales period is about 60 days, compared to 62 days in February 2023, 50 days in February 2024, and 64 days in February 2025. Overall, inventory pressure has improved this February.

10. Continuous Decline in New Energy Passenger Car Inventory

Analyzing only new energy vehicle manufacturers, inventory was 200,000 units at the start of 2023, then entered a rapid growth phase, reaching 880,000 units in April 2025—the recent peak. Driven by anti-inflation efforts, industry inventory fell to 620,000 units in September 2025, then rose to 680,000 units in February 2026—10,000 units below the November peak but 20,000 units higher than December. Recently, dealer and channel inventories face market retail below expectations, exerting significant overall inventory pressure.