Sales totalled 1.52 million last month, the China Association of Automobile Manufacturers (CAAM) said in a statement, a slowdown in growth from June's 11.2 percent improvement.

Sales for the first seven months totalled 12.30 million units, the group said, up 12.0 percent from a year earlier but lower than the 12.3 percent growth registered in the first half.

Automakers usually carry out equipment maintenance and send workers on holiday to avoid China's hottest weather in late July and early August, CAAM said in explanation of the slowdown.

Monthly passenger vehicles sales grew 10.5 percent year-on-year to 1.24 million units, the statement said, adding Chinese-brand sales increased 5.8 percent to 435,500 units to give them a 35.2 percent market share.

It was their lowest share of the market since the global financial crisis in 2008, the group said, adding their situation was "grim".

Among foreign brands, German carmakers had the largest share with 21.4 percent, followed by Japanese companies on 17.6 percent and US firms with 13.6 percent.

China became the world's largest auto market in 2009.

Consulting firm McKinsey forecasts the country's passenger car market to grow an average of eight percent annually through to 2020, when sales will reach 22 million.

Foreign automakers have announced plans to expand in China, where increasing wealth is giving consumers more money to spend.

US automaker General Motors announced in June it would invest $11 billion in China through 2016, as it broke ground on a plant to produce luxury Cadillacs.

And in May German auto giant Volkswagen broke ground on a new plant in the central city of Changsha, due for completion at the end of 2015, with an annual output capacity of about 300,000 vehicles.

Fall in China loans in July: central bank
Beijing (AFP) Aug 09, 2013 - Chinese banks granted fewer loans in July than the previous month, data released by the central bank showed Friday, in the aftermath of a liquidity crunch that rattled banks.

Banks extended 699.9 billion yuan ($114 billion) in new loans last month, the People's Bank of China (PBoC) said in a statement, down from 860.5 billion yuan in June.

But the July figure was still ahead of expectations, beating a forecast of 633 billion yuan by 14 economists polled by Dow Jones Newswires.

"We do see some negative impact of the June inter-bank liquidity crunch on credit availability for the real economy as evidenced by the sharp fall in corporate bond issuance and bills," Bank of America Merrill Lynch economists said in a report.

"But we believe the impact is muted as Premier Li Keqiang's team has taken decisive measures to calm the inter-bank market and to support growth."

Despite July's decline, economists described the month as overall showing "relatively stable credit growth".

A cash crunch spooked Chinese financial markets in late June before the PBoC, which had ordered banks to strengthen liquidity management, moved to calm nerves with an offer of support.

In late July, the PBoC injected 17 billion yuan into the domestic banking system, the first such move since February, a step analysts said indicated the central bank's intention to ease liquidity conditions in the banking system. So far this month it has added another 46 billion yuan.

The brief turmoil in June underscored rising concerns over excessive lending by banks and other weaknesses in China's financial system, including opaque non-bank forms of lending, often called "shadow finance".