China needs to make policy changes to counter a serious slowing of car sales as a result of the global credit crisis, a government minister said.

Minister of industry and information technology Li Yizhong said on Friday: "It's not just slowing growth, it's negative growth. The automobile industry has been seriously affected."

Passenger car sales fell 10.3% in the year to November, the third monthly fall in car sales this year and setting the stage for a possible double-digit decline in 2009, Reuters reported.

Li said the auto industry was important to the broader economy and suggested the Beijing government should take more aggressive measures to support it with measures such as cutting sales taxes for low-emission cars and giving tax incentives for people to trade polluting cars for new ones.

Beijing should also create preferential lending rates for individuals' car purchases and give preference to domestic-made cars when buying for its own use.