Vehicle sales in China fell sharply in January from a year earlier, an industry group said Thursday, as the Lunar New Year holiday hit demand in the world's biggest auto market.

Total sales fell 26.39 percent year on year to 1.39 million units in January, the China Association of Automobile Manufacturers said, pointing to fewer working days last month and the high comparative base in 2011.

Sales of passenger vehicles -- which account for the bulk of sales in China -- fell 23.8 percent in January from a year earlier to 1.16 million units, the group said in a statement.

The week-long Lunar New Year holiday, also known as the Spring Festival, was unusually early this year and has distorted monthly data.

But even before the holiday, auto sales were slowing in China after Beijing rolled back sales incentives and some cities imposed tough restrictions on car numbers to ease chronic traffic congestion and pollution.

Nationwide sales hit the brakes in 2011, rising just 2.5 percent to 18.51 million units compared with an increase of more than 32 percent in 2010.

The Spring Festival holiday also hit the sales of US auto giant General Motors, which reported an eight-percent fall in January from a year earlier.