China's FAW targets 18% rise in 2010 auto sales

BEIJING (Reuters) - FAW Group, China's second biggest carmaker, plans to sell more than 2.3 million vehicles in 2010, an increase of 18.3 percent on last year, the Xinhua news agency said on Sunday, citing a company executive.

Cuts in purchase tax and subsidies on small car purchases helped FAW sales rise by 27 percent in 2009 to 1.95 million vehicles, while revenue rose 23 percent to 260.8 billion yuan ($38.2 billion).

China's overall vehicle market rose by an explosive 46 percent.

The government stimulus, including subsidies for the purchase of small vehicles in rural areas and of new-energy cars in pilot cities, and also old-for-new subsidies, will continue to spur sales this year, FAW Group deputy manager Jin Yi told a forum.

FAW expects sales revenue to rise 11 percent to 290 billion yuan, he said.

FAW partners with Volkswagen AG.

Competitor SAIC Group, China's largest carmaker, has set its 2010 sales target at 3 million units, up from 2.72 million last year, the company's chairman, said on Saturday.

China overtook the United States as the world's largest auto market last year, when sales rose 46 percent to 13.64 million vehicles, according to the China Association of Automobile Manufacturers.

($1=6.827 yuan)

(Reporting by Lucy Hornby; Editing by Greg Mahlich)