Gasgoo.com (Shanghai November 8) - 1.25 million passenger vehicles were manufactured in China last month, China Business News quoted China Passenger Car Association statistics. The amount, while five percent higher than last October, is still 1.2 percent lower than in September. Meanwhile, monthly sales hit 1.22 million, a year-on-year increase of one percent but a 7.6 percent fall from the previous month.

Automobile sales were destined to fall in October due to the National Day holiday, CPCA General Secretary Rao Da said in an interview with the paper. The week long holiday marks the beginning of a slowing down in the domestic market. The phasing out of preferential purchasing policies and increasing fuel costs have also influenced buyer attitudes, all leading to this month's large drop in sales.

Although sales have somewhat decreased, the market is still doing much better than it would be doing otherwise, due to leftover demand from September. Dealers are still under a lot of pressure to decrease inventories. According to Su Hui, a market analyst with the China Automobile Dealers Association, dealers may start to slash prices on new vehicles in order to help fulfill manufacturer sales targets.

"Due to the need for manufacturers to fulfill their sales goals, a lot of dealers will be under a lot of pressure to decrease inventories in November," Mr. Rao said.