For years, China has been signalling its determination to move away from petrol and diesel. Back in 2016, Beijing adopted strict emissions standards modelled on Europe’s Euro 4 rules. By 2020, they were already in force. Fast forward three years, and the shift from China 6a to the far tougher China 6b regulation is shaking the global car market to its core.
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From 1 July, hundreds of thousands of conventional cars—still sitting in dealer lots—will no longer be authorised for sale. Manufacturers knew this was coming, but many failed to adapt. The message from Beijing is clear: the future is electric mobility, whether hybrid or fully battery-powered. The numbers speak for themselves: EV growth in China hit 13% in 2021, 20% in 2022 and is already at 25% for 2023.
European carmakers lose ground
This regulatory hammer has landed hardest on foreign manufacturers, particularly European ones. French car brands have been hit with a staggering 46.4% sales drop, with only 16,000 cars sold in the first two months of the year, according to data from Marklines. German firms, usually seen as robust players in China, suffered a 21.2% decline—still painful given their far larger volumes of nearly 600,000 vehicles.
Japanese and Korean manufacturers fared little better, registering falls of 40% and 22.4% respectively. American brands dipped by 12.5%. In sharp contrast, Chinese companies recorded a tiny but symbolic increase of 0.1%, buoyed by their affordable and fast-growing electric models.
The consumer trend is unmistakable: people in China want hybrids or fully electric vehicles, not outdated petrol engines. Yet most foreign carmakers still rely heavily on combustion models, leaving them with yards full of unsellable cars and little time to pivot.
An avalanche of unsold vehicles
The practical problem now is simple but brutal. What do you do with cars that suddenly cannot be registered as new? Unless something changes, they will have to be sold as second-hand stock, instantly slashing their value. Dealers are bracing for “fire sale” promotions to clear inventories before the July deadline, hoping to avoid an avalanche of unsold vehicles rusting in storage yards.
It’s a reminder of how quickly a market can turn when regulation and consumer appetite converge. China’s move has been a decade in the making, but many firms seemed paralysed, hoping the storm would pass. It hasn’t.
Carmakers ask for more time
The China Automobile Dealers Association has managed to win a six-month grace period, offering a small window to move cars off the lots. But critics argue the industry had years to prepare—first warned in 2016, reminded in 2020, and given a final three-year countdown.
Once the reprieve expires, non-compliant vehicles will be worth only a fraction of their intended price. For French brands already struggling with visibility in China, the blow could be existential. Aggressive discounting may help clear stock, but it won’t solve the structural issue: a lack of competitive, affordable electric models.
The bigger picture
In many ways, China has simply accelerated what is already happening worldwide. The world’s biggest car market is making it plain: the combustion engine’s days are numbered. For European firms, still heavily reliant on their traditional models, the message is painfully clear. Adapt—or watch as their cars pile up unsold, symbols of an industry caught off guard by a future that is already here.
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