SunSirs: Global Light Vehicle Sales Decreased by 2% Year-on-year to 6.63 Million Units in January

According to the latest report released by LMC Automotive, global light vehicle seasonally adjusted annualized sales plummeted to 81 million units per year in January 2026 due to a significant contraction in the Chinese passenger car market. Based on year-on-year data, global market sales for the month decreased by 2% to 6.63 million vehicles.

Sales in the US, Western Europe, and China markets all declined in the same month, marking the first time in a long period of time in the past. The influencing factors vary in different regions: sales in the US market are dragged down by severe weather; The Chinese market has suffered significant sales setbacks due to the reduction of preferential purchase tax for new energy vehicles and changes in the trade in subsidy policy; After experiencing an early release of demand in December 2025, the Western European market started 2026 with a lackluster performance. The performance of each market is as follows:

--North America--

In January, the sales of light vehicles in the United States decreased by 0.8% year-on-year to 1.09 million units. The sales days of the month were one more day than the same period last year, so the sales volume adjusted based on sales days decreased by 4.6% year-on-year. Seasonal adjusted annualized sales in January decreased from 16.3 million vehicles/year in December 2025 to 14.71 million vehicles/year. The market in January usually slows down after the end of year sprint due to a drop in demand, coupled with the impact of severe cold weather, resulting in continued sluggish sales in the last two weekends of the month. The average transaction price of new cars in January decreased by $943 month on month to $46,204, while it increased by 1.9% year-on-year. The average sales reward decreased by $288 month on month to $3,335, representing a year-on-year increase of 2.0%.

Canadian light vehicle sales in January are expected to decrease by 2.9% year-on-year to 113,000 units, but seasonally adjusted annualized sales will increase from 1.94 million units/year in December 2025 to 2.02 million units/year. Considering that most parts of Canada experienced heavy snowfall in January, this sales performance is already considered good. Mexico's January sales increased by 11.4% year-on-year to around 140,000 vehicles. Seasonal adjusted annualized sales increased from 1.46 million vehicles per year in December 2025 to 1.74 million vehicles per year. As Chinese car companies continue to contribute to overall sales growth, the country has set a record for the highest January sales in previous years.

--Europe--

In January, the light vehicle market in Western Europe experienced a slight slowdown, with sales decreasing by 2.0% year-on-year to 986,000 vehicles, and seasonally adjusted annualized sales dropping to 12.96 million vehicles per year. The sales trends of the five major markets in Western Europe are roughly consistent with December 2025, with the main deviation coming from Germany. The strong growth momentum in Germany cooled down in January, with sales experiencing their first decline in over six months. Due to political uncertainty continuing to constrain demand, sales in the French market have further declined. Except for the five major markets, some medium-sized markets in Europe experienced an early release of demand at the end of last year due to changes in some tax systems and adjustments to EU carbon dioxide emission standards.

The seasonally adjusted annualized sales of light vehicles in the Eastern European market rose to 5.14 million units per year in January. After experiencing seasonal early consumption in December 2025, the Russian light vehicle market weakened significantly in January, with sales dropping to 69,000 units (a decrease of 46% month on month and 17% year-on-year), indicating an unusually sluggish start to the year. The sharp decline in sales reflects another drop in the import volume of light vehicles in the country (a year-on-year decrease of 37%), mainly due to the increase in vehicle rebate fees, the increase in value-added tax in January, and the tightening of import restrictions, which are equivalent in effect to tariff shocks. In January, the sales volume of passenger cars in Türkiye reached 61,000, achieving year-on-year growth for the eleventh consecutive month. Seasonal adjusted annualized sales increased by 9% year-on-year, reaching 1.54 million vehicles per year. The country's market continued its strong growth momentum from 2025 this month.

--China--

In January, the sales volume of passenger cars in China decreased by 18.8% year-on-year to 1.44 million units, which was significantly affected by the reduction of preferential purchase tax for new energy vehicles and changes in the policy of trade in subsidies. The seasonally adjusted annualized sales of passenger cars are expected to decrease by 35% year-on-year to 13.7 million vehicles per year, the lowest level since April 2022. The main reason for the sharp decline in sales is the new energy vehicle sector, whose sales decreased by 23% year-on-year, reflecting the impact of the decline in subsidies for new energy vehicles. With the implementation of the trade in policy adjustment, the market is expected to rebound, but at least in the first quarter, the growth momentum remains bleak.

Due to the market slowdown caused by policy changes at the beginning of the year, resulting in lower than expected sales at the beginning of the year, the agency has lowered its forecast sales for the Chinese market by approximately 300,000 vehicles in 2026. Nevertheless, the market is expected to achieve slight growth in 2026. Looking at the long term, due to the expected end of subsidy support in 2026, the tax and fee incentives for new energy vehicles will continue to decline and prices will return to normal levels. The institution believes that the market performance will tend to weaken in 2027 and 2028.

--Other regions in Asia--

In January, the sales of light vehicles in Japan decreased by 2.5% year-on-year. Although the commercial vehicle sector grew by 21.9%, the passenger car sector decreased by 5.9%. Seasonal adjusted annualized sales have dropped to 4.47 million vehicles per year, the lowest in the past five months. In the coming months, the rise in credit costs and low consumer confidence are expected to continue to constrain the performance of seasonally adjusted annualized sales. The Bank of Japan will raise interest rates again in December 2025, reaching a decades high of 0.75%, exacerbating the pressure already affecting light vehicle sales.

In January, the sales of light vehicles in South Korea increased by 16.6% year-on-year to 122,000 units, thanks to the difference in the timing of the Spring Festival holiday, which included an additional working day compared to 2025. The seasonally adjusted annualized sales volume is 1.55 million vehicles per year, lower than the agency's annual sales forecast of 1.64 million vehicles for South Korea in 2026. It is expected that with the passage of time, the growth momentum of the country's market will gradually increase.

--South America--

In January, Brazil's light vehicle sales increased by 1.8% year-on-year to 162,000 units, but seasonally adjusted annualized sales decreased from 2.8 million units/year in December 2025 to 2.2 million units/year. However, seasonally adjusted annualized sales may not reflect the true state of the market, as seasonal changes can lead to increasingly concentrated sales towards the end of the year, resulting in an inevitable slowdown in the market in January. As a comparison, the seasonally adjusted annualized sales volume of the country in January 2025 was 2.1 million vehicles per year. With the development of the market, the popularization process of various electric vehicles is still ongoing.

In January, Argentina's sales decreased by 4.5% year-on-year to 63,000 vehicles, and seasonally adjusted annualized sales decreased from 524,000 vehicles/year in December 2025 to 492,000 vehicles/year. The process of inflation falling seems to have come to a halt, and price increases are beginning to rise, which may have had an impact on car sales. Despite this, sales in January almost doubled compared to the same period two years ago, making it a key sales month in history.

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