VEHICLE sales fell by 3.4 per cent in January, as the federal government's 50 per cent tax break on business investment in December ended.

The seasonally adjusted fall in January reversed a 3.3 per cent increase in December.

The government's business investment tax break had provided a major prop for the automobile industry during 2009 as part of its stimulus spending program.

Vehicle sales had accelerated by 17.2 per cent over 2009, but this annual growth rate was cut back to 15.6 per cent in January, the Australian Bureau of Statistics said.

All states and territories recorded falls in sales during January, apart from Western Australia where they grew 4.8 per cent and the Northern Territory which soared 14 per cent.

The biggest fall in sales was in NSW, declining 7.9 per cent, the ABS said.