The surge in oil prices has dealt a severe blow to the market, with sales of pure fuel vehicles in July plummeting 44% year-on-year, nearly halving.

Passenger car retail data for July 2026 released by the China Passenger Car Association shows the impact of high oil prices directly reflected in fuel vehicle sales, with pure gasoline models down 44% year-on-year, nearly halving sales volume, and the entire fuel vehicle segment weakening across the board.

In July, national passenger car retail totaled 1.461 million units, down 20.9% year-on-year and 8.8% month-on-month. The off-season combined with multiple negative factors put overall pressure on the market.

Among these, fuel vehicle retail fell 41% year-on-year, with notable differences across segments: pure gasoline vehicles dropped 44%, while ordinary hybrid models only declined 4%, making hybrids the only resilient segment within the fuel category.

Rising oil prices are the core reason. International shipping route disruptions pushed up crude oil prices, and domestic gasoline prices have accumulated an increase of 1,575 yuan per ton this year, significantly raising costs for daily commuting and long-distance travel. Many consumers planning to buy pure gasoline vehicles have directly abandoned their purchase plans.

Whether domestic, joint venture, or luxury brand fuel vehicles, all weakened simultaneously. Domestic fuel retail fell 46% year-on-year, mainstream joint ventures dropped 40%, and luxury brand fuel vehicles declined 28%. No category could escape the consumption contraction caused by high oil prices.

Compared with the bleak fuel vehicle market, new energy vehicles performed relatively steadily. In July, new energy retail reached 951,000 units, down only 3.9% year-on-year, with market penetration rising to 65.1%. For every 10 vehicles sold, more than 6 were new energy models.

By segment, domestic new energy declined slightly by 4%, while joint venture new energy surged 36%, and luxury electric vehicles fell 23%. The trend of consumers shifting from gasoline to electric vehicles is becoming increasingly evident.

While the domestic market cooled, exports became the industry's supporting pillar. In July, passenger car exports reached 918,000 units, surging 87.8% year-on-year, accounting for 41% of total manufacturer wholesale volume. Among these, new energy vehicle exports totaled 540,000 units, soaring 147.8% year-on-year. Overseas markets absorbed a large amount of domestic production capacity, alleviating pressure from weak domestic retail.

Domestic brand exports reached 775,000 units, up 87% year-on-year, with plug-in hybrid and pure electric models gaining increasing acceptance overseas.

Going forward, car buyers will further shift toward hybrid and pure electric models. The market share of pure gasoline vehicles will continue to shrink, and their survival space will keep contracting.