European New Car Sales Strong, But China Reaping The Benefits

European new car sales are holding strong in the first half of 2026, up nearly 6%, but automakers are cutting profit forecasts due to intensifying competition from China. Despite tariffs, the article says Chinese brands are gaining close to 10% market share by leveraging an estimated 30% cost advantage and more advanced software. Volkswagen and BMW issued profit warnings, while Stellantis and Renault cut output. Growth is expected to slow sharply in the second half, with annual industry growth potentially around 1% or even negative. The sales surge is mainly tied to discounted battery-electric vehicles, as European makers struggle with emissions targets while Chinese competitors outperform the broader market. Geopolitical headwinds and volatile consumer sentiment are adding pressure.