Ford Motor Co.

Chinese auto sales weaken in January as sales tax rises

China's auto sales shrank in January following a sales tax increase, an industry group reported Monday.

Sales in the world's biggest auto market declined 1.1 percent from a year earlier to 2.2 million, compared to December's 9.1 percent expansion, according to the China Association of Automobile Manufacturers. Total vehicle sales, including trucks and buses, rose 0.2 percent from a year ago to 2.5 million.

China's auto sales rose 15 percent last year after Beijing cut in half a 10 percent sales tax on small-engine vehicles. The government restored part of that reduction in January, raising the tax from 5 percent to 7.5 percent.

Demand for SUVs helped to offset...