China’s Auto Sector in Crisis as Dealers Rack Up Losses, Sales Plunge

Widespread losses, shuttered dealerships, and unpaid workers highlight deepening strain in China’s economy as consumers pull back on big-ticket spending.

People look at a Volkswagen car on display at a showroom in Beijing on May 10, 2020. Noel Celis/AFP via Getty Images

China’s once-booming auto retail sector is entering one of its most difficult periods in years, as a prolonged economic slowdown, shrinking consumer demand, and intense price competition push dealerships into widespread losses and trigger a wave of closures and job exits.

Among eight publicly listed auto dealership groups in China, only one managed to post a marginal profit in 2025, while the rest reported losses, according to Chinese online news platform Sina.