Growth in the mainland's passenger car sales fell for the sixth consecutive month in August, with volume only 0.1 per cent higher year on year. With inventories piling up, manufacturers have been pushing stock to dealers, weakening their pricing power and increasing pressure on the car distribution sector to consolidate, according to industry observers. Manufacturers sold 163,263 cars in August, virtually unchanged from the 163,252 units sold in July, according to preliminary figures from the National Passenger Car Association published in a Deutsche Bank report. 'In addition to macro tightening, lower car financing and purchase deferment due to price cuts, we believe the Olympics also had an impact [by keeping people at home],' the report said. 'We do not expect a recovery in industry fundamentals until 2005.' For the first eight months of the year, car sales rose 21 per cent year on year, compared with 22 per cent in the second quarter and 44 per cent in the first quarter. Yale Zhang, a director of emerging markets vehicle forecasting at consultancy CSM Asia, said August was traditionally the slowest month for car sales as hot weather kept people away from showrooms. 'I think the first quarter of next year will see better sales because the austerity measures should not go on for too long.' Economy car maker Geely Automobile Holdings said its August sales fell 32 per cent year on year and were 39 per cent lower than in July, although sales for the first eight months of the year were up 46 per cent year on year to 66,970 units. A Geely spokeswoman said the slowdown had not affected the firm's full-year sales target of 90,000 units. 'With our recent price cut and launch of new products later this year, we believe we can still make the target,' she said. Geely has reduced prices of its Maple saloons by 3.6 to 10 per cent this month. Beijing Hyundai Automobile had cut prices of its Sonata and Elantra models by 10 per cent, Mr Zhang said. Sales at Shanghai Volkswagen in the January-to-August period were down 8 per cent year on year. Brilliance China Automotive Holdings' Zhonghua saloon sales eased 48 per cent, but Denway Motors managed a 73 per cent increase in sales during the same period. A separate Deutsche Bank research report said the slowdown in sales to consumers was worse than the numbers suggested as they only reflected sales by manufacturers, which have been pushing stock to dealers. Its findings were backed by a survey of 30 dealers in Guangzhou, Shanghai and Beijing. 'Manufacturers request that dealers buy cars for inventory every month according to the sales target, even if the sales target for the previous month was not met,' the report said. 'The dealers are incentivised to hit high sales targets and keep large inventory. This is resulting in financial stress on the dealers.'