The Ministry of Industry and Information Technology, China's top industry regulator, said on Wednesday that it is optimistic about the nation's automotive sector in 2019, with demand from small cities expected to grow while more old car models will exit the market this year.

Xin Guobin, vice-minister of industry and information technology, said although the automotive industry saw declines in production and sales in 2018, no erratic fluctuations or major ups and downs would emerge this year.

"The demand from third to fourth-tier cities will continue to grow, and with new environmental standards put into effect, old car models will be driven out of the market at a faster speed. Therefore, we should maintain optimism toward the automobile sector," Xin said at a news conference in Beijing.

The comments came after retail sales of passenger cars in China fell 5.8 percent in 2018 to 22.35 million, the first annual fall since 1990, according to the China Passenger Car Association. One of reasons for the decline is that the country's car market has already reached an immense scale in production, which makes it unrealistic for the sector to maintain high-speed growth in China.

According to Xin, it is important to draw more attention to China's burgeoning new energy vehicle sector, whose strong momentum will continue in the coming years.

Last year, 1.26 million new energy vehicles were sold in China, up 61.7 percent year-on-year, and the figure is expected to reach 1.6 million this year, according to the China Passenger Car Association.

The performance of automobiles is a part of the nation's industrial output, an economic indicator measuring industrial activity, which is forecast to expand by 6.3 percent in 2018, meeting the target of around 6 percent growth.

Ouyang Minggao, an academician of the Chinese Academy of Sciences and a new energy vehicle expert, said at a recent forum that he expects 2025 to be a crucial point in the development of the sector, as lithium battery and fuel cell technology will become mature and the prices of new energy resources will see a turning point.

Li Fusheng contributed to the story.