BEIJING -- Auto production in China shrank to 1.59 million in October, a decrease of 4.48 percent from September, according to the China Association of Automobile Manufacturers.

Figures are showed that auto sales dropped 0.73 percent month-on-month to hit 1.61 million units in October, according to CAAM data, released Friday.

With production growth lower than sales growth, it shows that auto producers are cautious towards the current market situation, the CAAM said.

In 2010, the country ended incentive measures that had been introduced to buoy the economy after the 2008 crisis. As a result the market has been cooling.

On a year-on-year basis, auto sales in October rose 5.3 percent. But the growth of auto production eased to just 1.1 percent in October, the association said.

The decrease in the production growth was caused by a sharp drop in the output of Japanese-brand vehicles after Japan's illegal "purchase" of the Diaoyu Islands strained Sino-Japanese ties, the CAAM said.

Japanese-brand passenger car sales dived 38.2 percent month-on-month in October and 59.4 percent year-on-year.

In contrast, Germany, US, Korean and French passenger car brands all posted more than 20-percent growth in sales on a yearly basis in October, it said.

From January to October, automakers in the country produced 15.72 million vehicles, an increase of 4.6 percent from a year earlier, and sold 15.7 million units during the period, up 3.6 percent year-on-year.

The Japanese government on Sept 10 announced its decision to "buy" the Diaoyu Islands, which are China's inherent territory. The move has fueled anti-Japan protests and boycotts of Japanese products in dozens of Chinese cities over the past months.

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