China's auto sales fell for the second month running affected by the slowing economy, figures released by the China Association of Automobile Manufacturers (CAAM) showed on Friday.

September passenger car sales shrank 1.44 percent from September last year to 552,800 after the August sales contracted 6.24 percent from a year earlier.

About 5.1 million passenger cars were sold in the year to September, a rise of 11.36 percent from the first three quarters of 2007, but 12.48 percentage points lower than the rise last year.

The falling sales were driven by inflation and the tumbling stock market which drained consumer cash, said Jia Xinguang, an auto industry analyst.

Government policies to limit car use, including raising automobile consumption tax and the traffic restrictions on motorists during the Olympics also dampened sales, he said.

Ford Motors' China sales rose 7.13 percent in the first three quarters, below the 30-percent growth a year earlier. Volkswagen AG registered 13.1 percent rise in China, Hong Kong and Macao, also down from 30 percent a year earlier.

Jia predicted the spreading financial crisis would drag world car sales down by 0.3 percent from 2007 to 58.1 million, the first fall in eight years, as the financial crisis began to affect all business sectors, and the credit squeeze restricted the buyers.

(Xinhua News Agency October 12, 2008)