Imported cars are losing their grip on China's premium market at a startling pace. According to data released by Cui Dongshu, head of the China Passenger Car Association's market information sub-council, China imported just 21,000 vehicles in September 2026, down 49% year-on-year and 6% month-on-month. Cumulative imports for the first nine months of 2026 reached 290,000 vehicles, a 20% decline from the same period last year, as reported by Chinese outlet D1EV.
The slump marks a dramatic reversal for a segment that, before 2019, was the ultimate status symbol in China. Popular imported models routinely commanded premiums above sticker price, with buyers queuing for months to take delivery. Today, that once-coveted market is being steadily carved up by domestic new-energy vehicles (NEVs), which now hold more than 60% of the monthly passenger-car market, according to the report.
Domestic brands squeeze both ends of the market
The decline of imported cars stems from three converging forces: the rise of domestic brands, accelerated localization of joint-venture models, and China's leap forward in new-energy and intelligent-driving technology. The most immediate impact is visible among former best-sellers. Models like the BMW X5 and Mercedes-Benz's large SUVs, once imported mainstays, are now produced locally in China, typically priced 20% or more below their imported versions. That shift alone has diverted a large pool of buyers away from pure imports.
At the same time, domestic premium EVs are attacking the high end from a different angle. The full-size SUV segment, long dominated by imports, has been reshaped by models such as the Nio ES8 and Zeekr 9X, which offer 800V high-voltage platforms, advanced driver-assistance systems (ADAS) and spacious cabins at competitive prices. Ultra-luxury brands are suffering too: Bentley, Rolls-Royce and Ferrari have seen China sales drop by roughly 30%, while Maserati's sales have halved, according to the report.
The off-road segment tells a similar story. Jeep Wrangler, Toyota Land Cruiser, Land Rover Defender and Mercedes-Benz G-Class once ruled the 400,000-yuan-and-up (about $56,300) market. Now, domestic models like the Tank 300 are winning over enthusiasts. One aftermarket off-road specialist quoted by D1EV said, "The official modified Tank 300 performs no worse than imported off-roaders. I've seen many customers sell their imported vehicles and switch to a Tank 300."
Economic headwinds are compounding the shift. Zhang Hong, a member of the China Automobile Dealers Association's expert committee, noted that global economic slowdown has made high-net-worth consumers more cautious about discretionary purchases like luxury cars.
Technology gap closes, brand premium fades
The structural change is backed by hard numbers. In 2020, joint-venture brands held roughly 60% of the Chinese market; by the first half of 2026, that ratio had completely reversed, with domestic brands surpassing 60%. The reversal is underpinned by breakthroughs in core technology: immersive smart cockpits, full-scenario urban NOA (city-level assisted driving), and ultra-fast charging on 800V platforms are now standard selling points for domestic NEVs.
Features once reserved for imported cars priced above 1 million yuan (about $140,800), such as air suspension and lidar, now appear increasingly on domestic models in the 200,000-yuan (about $28,200) bracket. As the technology gap narrows, the brand premium that once justified imported cars' high prices is eroding. When consumers find that a 200,000-yuan domestic EV matches or exceeds a 600,000-yuan (about $84,500) imported luxury car in intelligence, space and equipment, the sales decline becomes inevitable, the report argues.
The pain is spreading to dealerships that once profited from markups and bundled sales. Some showrooms are now facing inventory backlogs and price inversions, and several have scaled back imported-car operations in favor of representing domestic premium brands with more stable margins. The retreat of imported cars, D1EV concludes, is not a short-term fluctuation but a direct market response to China's auto industry maturing from follower to competitor—and, in some areas, leader.
