China's auto market remains the world's largest, though its auto production and sales volume dropped slightly from June to July, said Zhao Hang, director of the China Automotive Technology & Research Center, on Aug. 2.

Statistics from the center show that China produced over 1.2 million vehicles in July, down over 4 percent from June and up nearly 13 percent from last year. Meanwhile, a total of nearly 1.1 million vehicles were sold, down nearly 7 percent from June and up more than 17 percent from last year.

In addition, the country's total auto production and sales volume from January to July reached more than 9.7 million and 8.2 million units, respectively, up over 39 percent and nearly 29 percent compared to the same period of last year.

The inventory cycle time for vehicles, defined as the average time from production to sale, continues to grow month by month. It rose from 55 days in June to 58 days in July. The inventory cycle for passenger cars rose from 57 days in June to 60 days in July, while the cycle for commercial vehicles rose from 49 days to 50 days.

Zhao said that the rise in the inventory cycle time reminds auto makers to curb production capacity, cut excess stock and lower the proportion of liquid capital.

China exported 250,000 vehicles over the first seven months of 2010, up nearly 56 percent from last year. The exports were worth over 3.1 billion U.S. dollars, up more than 33 percent from last year.

Cui Dongshu, deputy secretary-general of the National Passenger Car Information Exchange Association, said the highlight of this year's auto exports is that Anhui Province's exports of finished vehicles have started to recover and grow rapidly. According to statistics from the association, Anhui-based automaker Chery has achieved exceptionally high export growth.

Zhao predicted that China will experience a weak auto market in August because it is normally a slow period for auto sales, not to mention that auto dealers will still face considerable pressure from excessive inventory.