Passenger car sales in China grew more slowly last month as some buyers switched their budgets to the booming stock market while the frequent price cuts also dampened their buying decision.

Chinese car makers sold 545,800 passenger cars including cars, sports utility vehicles, multi purpose vehicles and mini buses in April, a rise of 15.98 percent from a year earlier, said the China Association of Automobile Manufacturers yesterday.

Last month's sales rise was 3.74 percent lower than in March.

The expansion follows a 30 percent sales jump in the first three months in China, the world's second largest auto market.

Cao He, an analyst from Mingzu Securities Co Ltd, also blamed the sales drop from a month earlier to the decision by auto buyers to divert funds set aside for vehicle purchases to the soaring stock market.

Cao, however, believes that car sales may benefit in the future as "the money they make in the bourse may help to boost car sales later."

China's benchmark stock index has surged 81 percent so far this year, after more than doubling from last year. The rally drew a rising number of individual investors to use their savings to open stock trading accounts, said the China Securities Regulatory Commission earlier.

Another factor for the slower sales growth was due to the price cuts by mainstream car makers which "spurred a wait-and-see attitude" among buyers, said Zhang Boshun, secretary of the CAAM Market Trade Commission. "The moderate growth is acceptable and helped to ease over-heated concerns."

Car sales expanded 16.63 percent to 411,800 in April from a year ago with Chinese-branded models accounting for 28.22 percent market share at 116,200 units.

More than 20,500 MPVs were sold during the same period, a year-on-year jump of 33.9 percent while sales of SUVs rocketed 53.5 percent to 28,600 units from a year earlier. Sales of minibuses rose 1.6 percent to 84,900 units last month.

China's sales for passenger cars in the first four months rose 20.7 percent to 2.08 million units.