China's car market, the world's second largest, is losing speed more quickly than expected due to a slowing economy, rising fuel prices and natural disasters, raising the prospect that sales growth could halve this year.

Growing by at least 20 per cent a year for the past three years, China has been one of the few bright spots for General Motors Corp. and other global auto giants as they struggle with a slump in US and European markets.

But sales growth last month slowed to a single-digit rate for the first time in two years. This may be the shape of things to come, even with a renewed focus on growth by China's economic policy makers.

"It's slowing down more than we anticipated," said John Bonnell, director of J.D. Power Asia Pacific Forecasting.

"Our forecast from the beginning of the year was about 15 per cent growth, or about 6.2 million passenger vehicles. We just revised our forecast down to about 5.95 million units."

Last month, sales of sedans, multipurpose vehicles and sport utility vehicles in China climbed 6.79 per cent from a year earlier, the smallest monthly gain in two years and well below annual growth of 20-30 per cent since 2005.

Reflecting the slowdown, inventories of unsold new vehicles rose to a four-year high of 170,000 units at the end of the first half, state media reported in July.

Growth in the first half had already dipped below 20 per cent, hampered in part by natural disasters.