BEIJING - The recent sentiment index on auto market, a gauge made to evaluate the well-being of the auto market, shows that the industry is at a low ebb as a result of declining sales, shrinking output, and high taxes.

The sentiment index report for the second quarter is jointly released by the China Association of Automobile Manufacturers and the National Bureau of Statistics. It shows that the figure is down by 0.5 percentage points from last quarter to 101.1. The index uses the auto market conditions in 2001 as a benchmark at 100.

Among the six variables that contribute to the index, the number of auto industry participants and the scale of spare parts exports, both rose, whereas other factors like fixed-asset investment, sales, tax revenues, and profits all slumped.

Tang Youcheng from the National Bureau of Statistics said that low sentiment index indicated that the industry is cooling down and entered an era of reshuffle.

Tang use "light blue" to describe the current auto market. "This color means the industry is stuck in minor bleakness; but on the other hand, it unveils an opportunity to adjust the industry." "In the past two years, the market was growing at a double-digit rate, which is creating dangerous bubbles."