China's passenger car sales slow down in July

In July China's automobile industry reported the lowest sales for passenger vehicles in 12 months, barring February, indicating that growth has begun to stagnate in the world's biggest auto market.

In July the domestic sales of cars - sports-utility vehicles, multi-purpose vehicles and minivans - declined cumulatively by 6.1 per cent to 957,724 from June sales, according to data released by the China Passenger Car Association (CPCA).

However, an increase of 3.6 per cent in July 2011 from July 2010, a tough month for the domestic auto market last year, did not signal a market recovery, said Rao Da, the association's secretary-general.

Rao predicted that the year-on-year growth rate in August would be lower, but that the sales volume would be higher compared with July.

Rao said automakers and dealers would see increasing pressure on their vehicle inventories, because production will continue to outstrip shrinking sales in the coming months.

China, in July this year, introduced a new localised policy to limit car purchases in Guiyang, the capital of Southwest China's Guizhou province, which has put additional pressure on the domestic vehicle sales.