AUTO sales in China fell the most in nearly seven years in September, stoking concerns the world’s biggest auto market could contract for the first time in decades this year amid cooling economic growth and a biting trade war.

Vehicle sales slumped by 11.6 percent to 2.39 million units last month, the third straight decline, the China Association of Automobile Manufacturers (CAAM) said Friday. It cited a sluggish economy, deleveraging and a tough pollution crackdown as reasons for the steep fall.

A stalling of China’s giant auto sector will be a concern for the government. It is a major driver of the economy and an important barometer of Chinese consumers’ willingness to loose their purse strings.

“The automotive industry has been a driver of China’s economic growth for years. Now it is pulling back,” Xu Haidong, CAAM assistant secretary general, said at a briefing in Beijing.

China’s top auto industry body said its already meager forecast for full-year growth would be missed, though the market should avoid a sales decline. Analysts have predicted the market could contract this year for the first time since at least the early 1990s.

The downtrend in sales underscores how international car makers, from General Motors (GM) to Toyota Motor, are in for a tough ride at a time when they are increasingly looking towards China as a driver of growth.

It also exemplifies the impact of the trade war, with autos being among the sectors hardest hit by tariffs. CAAM said last month sales were impacted by a sluggish economy and the knock-on effects of the trade war.

The slide in September auto sales follows a 3.8 percent fall in August and a 4-percent drop in July. Vehicle sales increased 4.8 percent in June.

September’s drop was the most since a 26.4-percent tumble in January 2012, which was in part due to the timing of the Chinese New Year holiday that year.

Sales for the first nine months of the year totaled 20.49 million vehicles, up 1.5 percent from the same period a year earlier.

(SD-Agencies)