Nomura: Mainland China's auto industry enters a "knockout round" this year; only companies pursuing high-quality development will survive.

Nomura released a research report stating that persistently weak domestic demand in China may accelerate resource consolidation in the auto industry and drive its expansion into global markets. Chinese auto OEMs released wholesale sales data for September 2026 on October 1, 2026, showing that the overall market remained weak. Nomura noted that, in fact, even during the traditional peak sales season, domestic demand and order performance were still below expectations, meaning that sales volume did not show a seasonal rebound. Based on preliminary data from the China Passenger Car Association (CPCA), the bank expects domestic market sales in September 2026 to decline by more than 25% year-on-year, which may be the most severe year-on-year drop so far in 2026. After four years of intense competition and a tightening policy environment, the entire Chinese auto market is clearly facing the dual challenges of oversupply and sluggish demand. Nomura believes that the industry has entered a "knockout round" in 2026, and only companies that achieve high-quality development will survive.