Passenger vehicle inventory exceeds 100,000 units

China's auto sales remain flat for three months since May, according to CAAM. In July, the output of passenger vehicles outnumbered sales volume by 30,000 units. China's passenger vehicle stockpiling has exceeded 100,000 units by the end of July.

China's auto production in July was 464,000 units, down 11% compared to the same month last year; auto sales were 433,000 units, down 6.4% from a year earlier.

It is normal that the sales went into flat period in this season of the year, auto industry analysts said. Sales in August are expected to rise 25% compared to that of July, auto analysts said.

Another phenomenon is that high power engine sedans are becoming more and more popular in recent years. The average displacement of engines increased from 1.53 L to 1.68 L since 2006, which is similar to the standard in Japan.

"It is a serious problem," said Rao Da, Secretary-General of National Passenger Cars Association. "The trend is in opposition to China's the auto industry policies and it will hurt the development of domestic auto makers. Therefore the government must take measures to limit the development of high power engine vehicles."