Retail passenger‑car sales in China dropped 15% in March, slipping to 1.65 million units compared with a year earlier, the China Passenger Car Association said Thursday. Despite a 59% jump from February, the steep annual decline highlights weakening domestic demand. Export shipments, however, rose, offering a modest offset to the broader market weakness.

Analysts cite two policy and seasonal factors that dented sales. A revised electric‑vehicle tax rebate reduced incentives just as consumers emerged from the Lunar New Year break, curbing showroom traffic. Model introductions stalled, with only 18 new models debuting in the first quarter versus 33 a year earlier, shrinking the product pipeline. At the same time, higher prices for memory chips, key metals and oil squeezed automakers’ cost structures.

Facing a shrinking home market, Chinese manufacturers are intensifying export drives and seeking joint‑venture footholds abroad. The modest export lift partially compensates for the domestic shortfall but does not erase profit pressure, prompting some firms to postpone new‑model launches and scale back capital spending. The current sales trajectory suggests investors will scrutinize how effectively firms can translate overseas momentum into sustainable earnings.