China's passenger car sales fell in August compared to the same month last year.

Purchases were restrained during the Olympics while rising costs triggered a wait-and-see attitude among consumers, according to analysts.

They said the dropping sales were a sign that China's auto industry had gone through its explosive stage and whole year sales growth was likely to slow to 6 to 8 percent after maintaining a double-digit increase over the past three years.

Sales of cars including sedans, sports-utility vehicles, multi-purpose vehicles and mini vans fell 5.4 percent to 376,406 units compared to the same month last year, the China Passenger Car Association said. Combined sales for the first eight months of the year rose 13.6 percent to 4.5 million units, it said.

China's passenger car sales have been dropping month on month since the second quarter this year after soaring oil prices and high inflation affected demand.

The country's measures to address its commitment to energy reservation and environmental protection led to speculation of higher fuel price and tax also caused consumers to hang on to their money.

"Sales decline in August is within expectation given the reason of a series of negative factors including the higher fuel tax and people's expectation of less income," said Rao Da, secretary general of the CPCA. "The dropping tendency is likely to continue in the second half of this year.

The CPCA estimated that overall passenger car market will grow 10 to 15 percent from 2009 to 2015.

Slower sales has prompted some makers to cut back production and lower their full year sales forecasts.

In August, sedan sales dipped 4.6 percent to 335,296 units while that of MPVs tumbled 28.7 percent to 12,255. Sales of SUVs retreated 0.8 percent to 28,855 units.

Shanghai Volkswagen ranked first among the top 10 manufacturers with sales of 40,230 vehicles, fueled by demand for the popular Lavida model. FAW VW and Shanghai GM sold 34,730 units and 31,722 units respectively.

China sold more than 8.2 million vehicles last year and total sales this year are forecast to rise to as many as 10 million vehicles.

(Shanghai Daily September 9, 2008)