China has seen its automotive industry stall after the latest figures from the China Association of Automobile Manufacturers indicated a marked monthly drop off in production and sales.

Sales in October were down 14.5 per cent on September at 404,700, with production standing at 374,300, representing a fall of 7.8 per cent.

Analysts identified a week-long holiday period and a backlog of inventories as the main reason for a fall in output, association spokeswoman Zhu Yiping told China Daily.

Ms Yiping also played down fears of a crash in the market, but did note a slowdown in the previously rapid rate of growth in China.

"We believe both vehicle output and sales will top 5 million units this year, although growth in the first ten months was much lower than last year," she said.

Accumulated vehicle sales for 2004 are still growing year-on-year at a rate of 17.6 per cent, as the total approaches 4.23 million units - up from the 4.13 million units sold in the same period last year.

Nevertheless, news that the world's fastest growing car market is beginning to cool off may alarm some industry analysts still unsure about the potential of the Far East market.