China's passenger car sales fell 5.3 percent year on year in July, with a total of 1.5 million passenger vehicles sold, according to the China Passenger Car Association (CPCA).
Excluding minivans, passenger car sales declined 5 percent year on year in July and 8.8 percent in the first seven months compared with one year earlier.
The country's new energy passenger vehicles soared 53.7 percent year on year to 645,000 units during the January-July period.
CPCA saw potential recovery of passenger car sales in August despite signs of a short-term slip, as a slew of new makes are to hit the market.
The association also expects long-term growth incentive for China's auto market after the country vowed against using real estate as a short-term means of stimulating the economy, saying it may cut debt for Chinese individuals and families.
China, the world's largest auto market, saw a drop in car sales for the first time in over two decades in 2018.
To boost car sales, the government announced a series of measures, such as prohibiting local governments from imposing any limit on the consumption and use of new energy vehicles.