BYD, one of China's leading automakers, is facing a slowdown in domestic sales but is making up for it with a significant rise in exports. In the first half of 2026, its revenue from the Chinese market dropped by 31 percent, with vehicle sales for its main brand falling by 45.9 percent to 795,169 units. However, more than half of the company’s total revenue now comes from overseas markets, amounting to 181.3 billion yuan, or 53 percent of its total revenue. This shift has helped offset the decline in domestic performance. Export sales have grown substantially, with 792,256 vehicles sold abroad in the first half of 2026, marking a 70.6 percent increase compared to the same period last year. In August alone, BYD achieved a record high of 190,000 units sold. The company’s overseas operations have also improved its overall profitability, with a gross margin of 22 percent in international markets, contributing to an overall margin of 18.85 percent. Despite a 20.5 percent decline in net profit for the first half of the year, these gains have helped cushion the impact of weaker domestic sales. The Chinese automotive market is currently in a state of flux, marked by a price war and a prolonged decline in private car sales, which have fallen for ten consecutive months. This has created intense competition, with over a hundred car brands struggling to stay afloat. Even though BYD is the dominant player in the sector, it is not immune to these challenges. However, the company has seen an encouraging recovery since the summer, driven largely by the strong performance of its electric vehicle models, which saw a 29.6 percent increase in sales. While electric vehicles are performing well, rechargeable hybrids have experienced a decline, with global sales dropping by 11.2 percent over eight months. To maintain its momentum and avoid the high costs of customs duties, BYD is expanding its manufacturing footprint in Europe. The company is working to establish itself as a true European manufacturer by producing vehicles locally, with a plant in Hungary set to begin operations soon. Plans are also under consideration for new production sites in Spain or France. By 2035, Chinese automakers are projected to manufacture 1.5 million vehicles annually in Europe, up from just 90,000 in 2026.