Vehicle sales in China are expected to continue to slow this year after the massive sales witnessed over the past few years.

According to AFP car sales were likely to rise by 12 per cent this year to 5.8 million units.

This would be down from 15.5 per cent last year and 34.2 per cent in 2003 when swathes of newly-affluent Chinese bought their first cars.

While passenger car sales are predicted to fare slightly better with an increase of 17 per cent, the slowing growth rate reflects the increasingly saturated Chinese market especially in urban areas.

It is also a consequence of government policies designed to slow down overheated industries. For example, tighter restrictions were placed on car loans last year to reduce sales.

The news is likely to cause concern amongst car manufacturers after earlier announcements of a massive build up in car inventories.