This was the first monthly decline for almost a year in China

This was the first monthly decline for almost a year in China

Sales of passenger vehicles in China fell by 9.8% year on year to 2.12m units in January, according to the China Passenger Car Association. 

This was the first monthly decline for almost a year and reflects fewer working days in January compared with a year earlier due to lunar new year holidays as well as a reduction in small car incentives at the end of last year.

The country's vehicle market expanded by almost 14% to just over 28m vehicles last year, including 23.9m passenger vehicles, helped by a reduction in the sales tax rate on vehicles with engines up to 1.6-litre from 10% to 5%. 

At the beginning of the year, the tax rate was increased to 7.5%, leaving many in the industry expecting much slower sales growth this year.

Some manufacturers continued to enjoy the growing popularity of compact passenger vehicles, including FAW which reported a 14% sales rise to a record 323,000 vehicles last month. 

This includes a 130% jump in sales of its in-house Jiefeng brand of vehicles to 29,000 units while FAW-Volkswagen sales rose by 15.5% to 147,000 units, FAW-Toyota 55,000 units (+4.6%) and FAW-Mazda 12,000 units (+4.6%).