CHINA'S passenger car sales posted the biggest decline in October after a stringent subsidy scheme took effect that crimped market demand, the China Passenger Car Association said yesterday.

Domestic auto makers sold a total of 1.11 million passenger cars last month, down 4.2 percent from a year earlier, according to the association's data. Last month, the sales rose only 9 percent.

The association said the sales plunge was mainly driven by the tighter subsidy scheme that started in October and targets cars consuming not more than 6.3 liters of fuel per 100 kilometers, lower from the previous 6.9-liter threshold.

Only 49 variations of 26 models meet the new standard, the National Development and Reform Commission said on October 19.

"That accounted for only 11 percent of the previous beneficiaries," said Rao Da, the association's secretary general.

"The tightened subsidy scheme, slower economic growth and higher crude oil price have all affected demand from potential buyers," he added.

Rao estimated "the sales decline will even accelerate in November" as tight credit may also restrain vehicle purchases among smaller business owners.

The sport-utility vehicle segment was the only one that posted a rise of 18 percent in sales to 132,658 units in October. Sales of sedans fell 3.7 percent year on year to 774,119 units in October,

In the first 10 months of this year, 11 million units of passenger cars were sold, a rise of 4.4 percent from a year earlier, the association said.