Both auto production and sales declined in April due to a decrease in demand and higher sales tax, data from the China Association of Automobile Manufacturers (CAAM) showed Thursday.
A total of 2.08 million vehicles were sold in April, down 2.2 percent year on year, CAAM said, while total output dropped 1.9 percent year on year to 2.14 million.
In the first four months, total output and sales increased by 5.4 percent and 4.6 percent year on year to 9.27 million and 9.09 million vehicles respectively. However, growth slowed from the same period last year.
"Although currently stable, China's auto industry is approaching the critical turning point for a cooling market," said Ye Shengji, deputy secretary general of CAAM.
As the world's largest auto market, China saw auto sales growth hit 26.1 percent in September 2016, the highest point in more than three years, before winding down in the following months.
In October 2015, China slashed the sales tax on cars with engines of 1.6 liters or below from 10 percent to 5 percent, helping increase total auto sales to a record high of 28.03 million last year.
The tax was raised to 7.5 percent in 2017 and will return to 10 percent again in 2018.
China has had the world's largest car market for eight consecutive years.
