Chinese auto sales weaken sharply in March after tax rise

China's auto sales growth weakened sharply in March, with demand for SUVs decelerating and sales of sedans contracting compared with a year earlier.

An industry group, the China Association of Automobile Manufacturers, said Tuesday sales of cars, minivans and SUVs rose 1.7 percent from a year earlier, down from the 6.3 percent growth in the first two months of the year.

Auto demand was forecast to cool after Beijing raised a sales tax on Jan. 1 but the March decline was unexpectedly severe. Analysts have said they expect sales growth in mid-single digits this year, down from double digits.