CHINA'S auto sales in the first two months of this year posted the biggest decline in the last seven years despite a rebound in February, prompting carmakers to prepare for bigger price cuts to entice consumers back to the showroom.

Vehicle deliveries in January and February fell 6 percent year on year to 2.95 million units, the China Association of Automobile Manufactures said yesterday.

Passenger car sales dropped 4 percent to 2.37 million while commercial vehicle sales plunged 12 percent during the same period, totaling 35,400 units.

The slumping sales came as China's slowing economy and the end of purchase stimulus restrained market demand while higher fuel prices further discouraged potential auto buyers.

However, car manufacturers sold 1.56 million vehicles in February, an increase of 25 percent from the same period of last year, the association's figures showed. The rally was mainly a result of the low comparable base because last year's week-long Spring Festival holiday was in February.

Last month, passenger car sales, including sedans, sport-utility vehicles and multi-purpose vehicles, were up 27 percent while commercial vehicles sales gained 18 percent, according to the association.

In order to sustain growth momentum, many automakers are offering price discounts to improve market competitiveness.

Minister of Industry and Information Technology Miao Wei earlier said carmakers will face big difficulties in achieving a 9.5 percent growth in passenger car sales projected by the association.

The Chinese government is also rolling out policies to support development of its own industry and rein in overcapacity, denting efforts by foreign automakers who have counted on China, the world's largest auto market, for revival.