UPDATE 1-China July car sales jump, strong growth seen ahead

* China car sales jump in July largely on policy support

* Weak sales in July 2008 also help lift growth rate

* Double-digit growth seen extending into following months (Adds analyst quotes, detailed sales figures)

By Fang Yan and Jacqueline Wong

SHANGHAI, August 7 (Reuters) - China's passenger car sales in July jumped 70.54 percent from a year earlier, official data showed on Friday, as rising consumer confidence continued to boost automobile demand, boding well for double-digit or faster sales growth for the rest of the year.

A total of 832,600 passenger cars were sold in July, up from 488,200 a year earlier, but shy of 872,900 units sold in June, the China Association of Automobile Manufacturers said in a statement.

Overall vehicle sales, from trucks to buses, surged 63.57 percent in July to 1.09 million units from a year earlier, the association said, after gaining 36.48 percent in June.

Industry analysts attributed the impressive July figures largely to Beijing's stimulus measures which had effectively bolstered automobile demand in China.

But weak auto demand in the second half of last year in the wake of a devastating earthquake also played a role in inflating the year-on-year growth rates of last month, analysts said.

"July was a very solid month as consumer confidence remains strong, but a weak H2 in 2008 was also a factor," said Qin Xuwen, an industry analyst with Orient Securities.

"Still, there is little question that double-digit or much higher year-on-year growth rates can be extended in the remaining months."

Auto sales had eased sharply since July 2008 due to the earthquake in southwest China and as a slowing economy dented consumer confidence.

POLICY SUPPORT

Demand started to recover in February this year thanks to a raft of government policy support measures, from a halving in the sales tax on small cars to subsidies for buyers in rural areas, effectively lifting automakers sales to record levels.

General Motors [GM.UL] has been among the major beneficiaries of the policy initiatives. Its China vehicle sales jumped 77.7 percent to 144,593 units in July, extending an uninterrupted series of single-month sales since the beginning of the year. [ID:nSHA181658].

It expects to exceed its forecast of selling 1.4 million vehicles in the country this year, up from 1.1 million in 2008, said Johan Willems, vice president of GM International Operations, in an interview with Reuters late on Thursday.

"We have run pretty quickly in China to take advantage of the market, and we have a good footprint there. We had the best July ever in China," Willems said. [ID:nSP472246].

Many Chinese and foreign players, from Daimler AG's (DAIGn.DE) Mercedes-Benz unit to China's biggest SUV maker Great Wall Motor Co (2333.HK), have expressed optimism for the second half.

In the first seven months, passenger car sales rose 30.91 percent to 5.37 million units in the country. Overall vehicle sales grew 23.38 percent to 7.18 million units, data showed.

"2009 is a very special year. We are not seeing any slowdown in the summer months and sales have been strong all the way through from February," said Orient Securities' Qin. (Reporting by Fang Yan and Jacqueline Wong)