Auto sales in China fell sharply in February, marking the fastest decline in two years as weakening demand and seasonal factors weighed on the world’s largest automobile market.

Data released on Wednesday by the China Association of Automobile Manufacturers showed that total vehicle sales, including exports, dropped 15.4% year-on-year in February. The decline represents the steepest fall since February 2024.

Domestic car sales saw the biggest drop, plunging 34.2% from a year earlier to around 950,000 vehicles. The slowdown in local demand came as government incentives that previously supported purchases were reduced.

Exports, however, showed strong growth. Overseas shipments surged 58% year-on-year to approximately 590,000 units last month, partially offsetting the decline in the domestic market.

Industry analysts noted that automobile production and sales in China often fluctuate during the first two months of the year due to the shifting timing of the Lunar New Year, which disrupts factory schedules and consumer activity.

Despite February’s steep drop, the combined figures for January and February show a more moderate decline. Domestic sales and exports together were down 10.7% during the first two months of the year.

The latest data highlights continuing pressure on China’s auto market, where reduced incentives and slowing consumer demand have begun to weigh on overall industry performance.