In March 2023, retail sales of the passenger car market in China reached almost 1.6 million units with a year-on-year growth of 0.3 percent and a month-on-month growth of 14.3 percent, the weakest March growth rate the country has ever registered in this century. 

The China Passenger Car Association (CPCA) attributed the weak retail sales performance to factors such as low consumption and wait-and-see atmosphere caused by market price chaos. Nonetheless, retail sales of 270,000 luxury cars recorded a 17 percent year-on-year and 35 percent month-on-month growth.

Separately, retail sales of Chinese brands totaled 770,000 units, up 2 percent year-on-year and 9 percent month-on-month. The domestic retail share of Chinese brands was 48.8 percent, a year-on-year growth of 0.7 percentage points.

With increased export capacity, 290,000 passenger cars were exported, up 172 percent year on year, of which new energy vehicles accounted for almost a quarter. From January to March, 780,000 passenger cars were exported, up 90 percent year on year.

The Shanghai Auto Show, to be held on April 18, will surely become a powerful platform and catalyst to promote domestic auto consumption. The quantity of the orders placed at the auto show will also become an important indicator of the market warming up.

According to the CPCA, due to the impact of the United States Federal Reserve's interest rate hike, the Chinese car market was affected by multiple pressures such as shrinking demand, oversupply and weakening expectations at the beginning of this year, resulting in insufficient consumption in the new car market. In order to stabilize economic growth driven by automobile consumption, it is necessary to make comprehensive efforts from both policy and market perspectives to boost market confidence, the CPCA added.