Sales in October were down 14.5% on September at 404,700, with production standing at 374,300, representing a fall of 7.8%.
Analysts identified a week-long holiday period and a backlog of inventories as the main reason for a fall in output, association spokeswoman Zhu Yiping told China Daily.
Yiping played down fears of a crash in the market, but did note a slowdown in the previously rapid rate of growth in China.
"We believe both vehicle output and sales will top 5 million units this year, although growth in the first ten months was much lower than last year," says Yiping.
Accumulated vehicle sales for 2004 are still growing year-on-year at a rate of 17.6%, as the total approaches 4.23 million units - up from the 4.13 million units sold in the same period last year.