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China's auto market remained sluggish in January, with sales down 15.8 percent year on year, data from the China Association of Automobile Manufacturers (CAAM) showed Monday.

China sold 2.367 million vehicles last month, while auto output reached 2.365 million units, down 12.1 percent from one year earlier.

Passenger car sales fell for the seventh straight month, plunging 17.7 percent year on year to 2.02 million units. This marks the biggest decrease since January 2012.

Xu Haidong, assistant secretary general at the CAAM, said sales will likely continue the downward trend in February, partly due to a slowing economy and a demand decline in smaller cities.

The slowdown in sales can also be attributed to the Spring Festival, which fell on Feb. 5, as consumers always delay their purchases ahead of holidays, analysts said.

The January drop comes on the heels of a 2.76-percent drop in last year's sales, the first decline in 28 years.

There was still a bright spot though last month. New energy vehicles (NEV) performed strongly, with sales surging 138 percent year on year to 96,000 units. Sales of all-electric cars hit 75,000 vehicles, up 179.7 percent, while those of plug-in hybrid electric vehicles amounted to 21,000, up 54.6 percent.

Thanks to the government's preferential policies to boost clean energy use to curb pollution, China has become one of the fastest-growing NEV markets.