Cadillac purchases are on hold in China

Shanghai

THE rout in China stocks is posing another threat to the world's biggest car market, jeopardising growth plans for companies from Volkswagen AG to General Motors Co (GM).

Chinese equities have suffered the biggest plunge since 1996, leaving would-be buyers with less cash to spend. Dealers are already reporting lost sales from the stock tumult and automakers are bracing for more pain after a slowdown in the once-hot car market.

"Dealers are gritting their teeth," said Zhu Kongyuan, secretary general of the China Auto Dealers Chamber of Commerce, a Beijing-based trade group. "People won't buy cars if they think their money bags will shrink. There are no magic tricks here."

Global automakers have plowed billions of dollars into Chinese factories to keep up with a market that's grown eightfold since 2000 and surpassed …