China's car sales dropped 7.99% in October to 178,600 units, indicating a weakening industry following a rebound a month earlier, Reuters reported, citing the official China Securities Journal.

While down from September, October sales were 7.39% higher than a year earlier, the newspaper reportedly said, referring to official data from the China Association of Automobile Manufacturers.

Sales of sedans had jumped almost 14% in September as the world's fourth-largest vehicle market appeared to shake off the impact of car loan curbs aimed at cooling the fast-growing industry, the report said.

"It is natural that sales fell in October due to the extended National Day holiday," the newspaper said. "An on-year rise in sales shows that the industry is still growing."

Reuters said car production slid almost 20% in October from September, to 147,100 units, adding that industry analysts expect car sales to rise just 10-20% this year after doubling in 2003 to about two million sedans.

The newspaper reportedly said sales may not pick up again until the second half of 2005.

Newer brands such as Hyundai and Honda fared better than more established companies in the Chinese market like Volkswagen, Reuters said.

Volkswagen, the market leader with about a quarter of the market, reportedly saw sales slip 11.5% in October from September while sales at General Motors Corp's flagship Shanghai venture dropped 14.4%.

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