The auto market has yet to leave the industry downturn behind as subsidy withdrawal pours cold water on buyer interest.

Auto sales across the nation totaled 1.52 million units in October, representing a slight drop of 1.07 percent year on year, said the China Association of Automobile Manufacturers (CAAM). Output in October stood at 1.57 million units, increasing 1.72 percent.

The October figure brought the sales for the first 10 months to 15.16 million units, growing 3.15 percent from a year earlier. The output from January to October amounted to 150.34 million units, up 2.66 percent.

The CAAM expected the market weakness to continue through the rest of the year as the government rolled back some policy incentives, dealing a blow to market demands.

The Ministry of Finance adjusted its two-year-old subsidy policy for fuel-saving vehicles, making more than 70 percent of the original 427 models ineligible for subsidies, effective October 1.

"An increasing number of global auto makers are now making low-end, small-engine cars in China, and that means intensifying competition for Chinese manufacturers," said Dong Yang, Secretary General of the CAAM.

"The sales decline will even accelerate in November as tightening monetary policies may also restrain vehicle purchases among smaller business owners," said Rao Da, Secretary General of the China Passenger Car Association.

CAAM expects vehicle sales in 2011 to grow 5 percent, down from its original forecast of 10-15 percent.