Adds divergence from preliminary data in paragraph 4-5, charts

BEIJING, Nov 10 (Reuters) - China's car sales fell unexpectedly in October from a year earlier, snapping an eight-month growth streak, as consumer sentiment weakened amid reduced tax exemptions and government subsidies.

Car sales edged down 0.8% to 2.27 million units last month versus a 6.6% increase in September, data from the China Passenger Car Association showed on Monday.

Growth in sales of electric vehicles and plug-in hybrids slowed with a 7.3% rise against a 15.5% gain in September.

The final results were far below CPCA's preliminary data released last week, which expected 6% sales growth year-on-year and a 17% rise in so-called new energy vehicle sales.

"Cars sold wholesale (to dealerships) beat expectations in the last week of October and the preliminary numbers were compiled based on the assumption that retail sales should be close to wholesales, which turned out to be adding inventories," said Cui Dongshu, secretary-general at the association.

With purchase tax breaks of up to 30,000 yuan ($4,211.71) for EVs and PHEVs due to halve from 2026, an increasing number of carmakers including Xiaomi 1810.HK, Nio 9866.HK, and Li Auto 2015.HK have offered subsidies of up to 15,000 yuan to encourage orders to be delivered next year.

Meanwhile, government subsidies that spurred more than 12 million auto trade-ins this year are dwindling as the consumer subsidy scheme draws to a close at year end.

Nearly 20 provinces and cities have suspended or tightened subsidised auto trade-ins, dampening consumers' buying activity, Cui said.

Young people not keen on buying a car also resulted in a dearth of first-time car buyers, he added.

Tepid demand only intensifies competition in the world's largest auto market.

Local EV bellwether BYD 1211.HK 002594.SZ extended a sales decline last month, while Geely and Leapmotor 9863.HK both refreshed sales records, leading a challenge against BYD in the budget segment.

One model that could compete with BYD's cheapest EV offering Dolphin is the Aion UT super EV. With a 500-km (311-mile) driving range and CATL's battery-swapping technology, the new car is competitively priced from 49,900 yuan.

With strong overseas shipments from BYD and others to diversify beyond the home turf, China's car export growth quickened to 27.7% from 20.7% in September, CPCA data showed.

($1 = 7.1230 Chinese yuan)

(Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh; Editing by Jacqueline Wong and Joe Bavier)

((qiaoyi.li@thomsonreuters.com;))