SHANGHAI/BEIJING: China’s passenger car sales fell 37.9% in January, an auto industry body said on Wednesday, as demand weakened after a tax cut on combustion engine vehicles and electric-vehicle subsidies expired.

Sales of new energy cars, including purely electric cars and plug-in hybrids, fell 6.3% in January, accounting for a quarter of the total 1.3 million car sales in the month, CPCA data showed.

Chinese people also celebrated a full week of the Lunar New Year holiday in the month, making it a quieter January compared with previous years.

Despite of signs of easing demand in the world’s largest car market, China’s central government did not extend a 50% purchase tax cut on combustion engine vehicles when it expired at the end of December.