Beijing's largest auto market, the Beijing Asian Games Village Automobile Exchange, sold 1,955 vehicles last December, 14 percent less than the market's monthly average.

The total number of purchases last year were 27,420, only 67 percent of the amount in 1998, China Daily reported.

Auto markets in other cities and provinces have also reported a sales slump.

Qie Xiaogang, an exchange manager of the market, was quoted as saying that the downturn in sales did not necessarily translate into a shrinking demand.

The fact that more people have consulted the market for information suggested that the desire to own a car is still high, Qie said.

Experts said they believe the slump may be tied to China's expected entry into the World Trade Organization (WTO), which would likely mean cheaper prices of imported cars, according to the English-language national newspaper.

There have been reports that tariffs on imported cars would be reduced to 25 percent within six years after the country's WTO entry from the present 100 percent on vehicles with 3.0-litre engine displacement and above, and 80 percent on smaller ones, said China Daily.

But officials from the State Administration of Machinery Industry, which oversees the motor sector, have said repeatedly that auto prices will not be reduced much in the coming two to three years.

China will reduce tariffs but only in a gradual way. A licensing system will continue to protect the sector, which officials describe as an infant industry, China Daily said.

To foster auto sales, the central government is considering stopping regional administrations from imposing fees on motor vehicles and is mulling over a plan to consolidate official levies into a fuel tax. (China Daily)