UPDATE 2-China's Dongfeng Motor says 2009 car sales surge

* 2009 passenger car sales up 46 pct, Dec sales up 64 pct

* Full-year vehicle sales up 35 pct, beats forecast

* Sales of JV with Honda, PSA, Nissan strong

* Policy incentives boost market demand (Adds Dongfeng's confirmation, JVs sales)

By Fang Yan and Jacqueline Wong

SHANGHAI, Jan 8 (Reuters) - Major Chinese automaker Dongfeng Motor Group (0489.HK) said on Friday it sold 45.6 percent more passenger cars in 2009 from a year earlier, as Beijing's policy incentives bolstered automobile demand.

Dongfeng, the China partner of Honda Motor (7267.T) and Nissan Motor (7201.T), sold 1.05 million passenger cars last year, compared with 727,392 units in 2008, it said in a statement, confirming an earlier Reuters story.

That marks an acceleration from 37.8 percent growth in the first three quarters of 2009 and a significant improvement from 14 percent growth in 2008, when auto sales were hit after a deadly earthquake in Sichuan province and a slowing economy.

Passenger car sales in December jumped 64.4 percent to 112,137 units, it said.

"Auto sales have been extraordinarily strong this year because of government policy support. Dongfeng is also among the major beneficiaries," said Zhang Xin, an analyst with Guotai Junan Securities.

For the full-year of 2009, Dongfeng's overall vehicle sales came to 1.43 million units, up 35 percent and topping its own forecast of 1.3 million units. Vehicle sales in December jumped 74.8 percent to 150,887 units, it said.

Dongfeng, which also makes cars in partnership with PSA Peugeot-Citroen (PEUP.PA), is the latest auto firm to report strong sales in China where automobile demand rebounded sharply thanks to Beijing's aggressive cut in sales tax for small cars and subsidies for buyers in rural areas.

China, which overtook the United States as the world's largest auto market in 2009, has become a safe haven for global industry giants battered by the industry's worst ever downturn.

SAIC Motor Corp (600104.SS), a General Motors [GM.UL] and Volkswagen AG (VOWG.DE) partner, sold 1.6 million passenger cars in 2009, up 57 percent from 2008. [ID:nTOE60309K]

Battery and car maker BYD (1211.HK), 10 percent owned by Warren Buffett's Berkshire Hathaway (BRKa.N), raised its 2010 sales target by 14 percent to 800,000 units in late December after achieving its 2009 target ahead of time. [ID:TOE58T05H]

Dongfeng Honda sold 210,601 units last year, up 28.4 percent from a year earlier. Sales of Dongfeng's tie-up with PSA Peugeot-Citroen jumped 51.6 percent to 270,006 units. Sales of its car venture with Nissan came to 518,968 units, up 48.1 percent, the company said. (Editing by Lincoln Feast)