On the eve of China’s largest car show in April, executives and analysts braced themselves for a “new normal” — single-digit sales growth after two fat years. Yet some are beginning to wonder if the world’s largest car market is actually entering an abnormal era of flat or even falling sales.

The catalyst for this pessimism was a sharp drop in year-on-year sales — 9.4 per cent higher in March, but by June 3.4 per cent lower than the same month last year, according to wholesale figures compiled by the China Association of Automobile Manufacturers. The decline was the industry’s first since early 2013.

Coupled with an economy growing at its slowest annual rate in 25 years and the recent crisis on China’s stock markets, the outlook suddenly seemed bleak in an industry that has been a cash cow for mass market and premium car brands for the past five years. “It will be quite challenging for carmakers because the market is cooling and the trend will not be reversed anytime soon,” said Teng Bingsheng, a professor at the Cheung Kong Graduate School of Business in Beijing.