CHINA'S passenger car sales rose 14.2 percent in the first half of this year, lower than an earlier expectation of 20 percent, as more stringent macroeconomic control policies and record high oil prices curbed purchases.

Domestic car makers sold a combined 3.3 million passenger vehicles including sedans, multi-purpose vehicles, sport utility vehicles and mini buses from January to June, the China Passenger Car Association said yesterday. Production rose 16.9 percent to 3.6 million vehicles during the same period.

Though sales in June grew 13 percent year on year to 517,469 units, it was the third consecutive month the rise in sales has reversed, triggering market speculation of a slowdown in the overall market for this year.

Rao Da, secretary general of CPCA, the semi-official automotive body, blamed the reversal on floods in south China that halted production of some car makers and the suspension in vehicle shipments.

Buying put off

China raised the prices of gasoline and diesel by 17 percent at the end of June. Expecting further price rises, many auto buyers postponed their purchase plans, he added.

"The impact of higher fuel prices on car sales in China will be temporary,'' said Rao, "But it will boost the sales of vehicles powered by small engines."

Other analysts also believed that the bearish stock market, which plunged 50 percent since the beginning of this year, was also part of the reason behind the weak market demand.

Half-year sales of sedans rose 13 percent to 2.39 million units in China while SUVs posted a 41.7- percent sales jump to 211,885 units. Sales of MPVs added 2.4 percent to 106,297 units.

Of the top 10 best selling car makers in June, Shanghai VW ranked first with retail sales of 40,124 units in China. Next came FAW-VW and Shanghai GM, which sold 38,908 units and 35,189 vehicles respectively.

The China Association of Automobile Manufacturers is due to release official figures later this year.