A dip in sales at BMW's Chinese joint venture, Brilliance China Automotive Holdings, has added to the signs of a slowdown in the domestic automotive market.

The firm said that its 2004 earnings had been hampered by what it termed a “significant” set back in Chinese vehicle sales, as shares in the firm slid by 20 per cent on the New York Stock Exchange.

While acknowledging that it had not yet been able to determine the whole picture of the slowdown, Brilliance said that it was clear that the industry was heading for less prosperous times.

China has been among the fastest growing automotive markets in the world in recent years but the rate of growth appears now to be slowing.

State media reports that moves by the government to ease the exponential growth appears to be taking effect, as changes to the rules governing loans for car purchases have been enacted.

Analysts told Xinhua that they expect the market to grow by ten per cent this year, a step down from the 2.33 million unit growth - 15 per cent - recorded last year.