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China's August passenger car sales rose at the slowest pace in three months as rising oil costs and falling car prices deterred buyers. China FAW Group Corp. and SAIC Motors Corp. sold fewer vehicles.

Car sales rose 24 percent last month to 292,400 units while production increased 35 percent to 315,500 units compared with last year, the China Association of Automobile Manufacturers said Monday. Sales of vehicles, including cars, vans and trucks, rose 9 percent to 418,700 units while production rose 17 percent to 441,600 units last month.

Volkswagen AG, Europe's largest carmaker, reduced prices on 18 models made in Shanghai last month by as much as 14 percent to regain sales growth. The discount, the first across-the-board price cuts this year, caused consumers to delay their purchases on hope of getting better bargains later.

"Consumers' confidence was again shaken by the recent price cuts," said Yao Hongguang, an analyst at Ping An Securities Research Co. in Shenzhen. Customers "need time to observe and calculate how costly it will be to afford a car if gasoline price keeps rising," he said.

The Chinese Government raised gasoline prices three times this year. A liter of regular-grade gasoline, which is 16 percent higher in China this year at 4.26 yuan (US$0.56), has risen more than 80 percent from the lowest price in 2003.

FAW Group, SAIC, Dongfeng Motor Corp., Changan Automobile Group and Beijing Automotive Holdings Corp. were the nation's five largest vehicle assemblers in terms of sales in the first eight months, according to the association. The five have separate ventures with Volkswagen, General Motors Corp., Ford Motor Co., Toyota Motor Corp., and Honda Motor Co.

As many as 2.45 million passenger cars were sold in China, the world's fourth-biggest automobile maker, in the first eight months of this year, 15 percent more than in 2004, while production rose 10 percent to 2.5 million units.

Vehicle sales rose 11 percent to 3.64 million units and output increased 8.23 percent to 3.7 million units, the association said.

Sales of China's top ten biggest automakers accounted for 83 percent of the nation's automobile sales in the first eight months. China currently has 122 assemblers, Xinhhua aid in August, citing government data.