Chinese car manufacturers are seeing profits fall, as a tightening on government loans begins to impact on the market.

Figures from the country's National Bureau of Statistics website indicate that profits have fallen by around a third in the third quarter in comparison with 2003.

The statistics underline indications that the Chinese market is cooling off, after a period of intense growth in recent years.

Experts say the decision by the central government to tighten banks' purse strings when it comes to providing loans for consumers is one of the main reasons for the fall off.

Wang Jun, chairman of the Taizhou Tailong City Credit Co-operative, explained to the Financial Times that banks were now "very cautious about lending for cars".

Annual growth remains steady in the region, as the latest figures from the China Association of Automobile Manufacturers indicate, but the latest news does point to a marked slowdown in the rate of expansion.

At present accumulated vehicle sales for 2004 are growing at an annual rate of 17.6 per cent, as the total number of units sold approaches 4.23 million units - up from the 4.13 million units sold in the same period last year.