WRAPUP 2-Asia automakers post robust Aug sales, demand may slip

* China Aug car sales 977,000, up 59.3 pct yr on yr

* Hyundai sales up 17 pct yoy but down 2.2 pct vs July

* U.S. launches safety probe on Hyundai Sonata

* Auto sales in Japan up 46.7% yoy, excluding mini vehicles

* Sale of top Indian automakers rise 24-32 pct (Adds detail on Indian automaker sales)

By Hyunjoo Jin and Fang Yan

SEOUL/BEIJING, Sept 1 (Reuters) - Asian auto sales rose strongly in August, benefiting from government moves to encourage purchases of new and cleaner vehicles, though an uncertain U.S. economy and slowing growth in China look set to curb demand.

In China, the world's biggest auto market, passenger car sales jumped almost 60 percent for the month, a sharp improvement from the sales rise seen in July. [ID:nBJB003929]

Major automakers in the fast-growing Indian market also reported robust sales, but global industry executives and analysts are cautious about the demand outlook for the rest of the year, given economic concerns in major markets.

"Overall sales growth in the United States is already slowing down and only consumers who need to replace their aged models are buying," said Kevin Lee, an analyst at Shinhan Investment in Seoul. "It could slow down further but a sharp reduction is unlikely as the economy is believed to be better than during the financial crisis."

"Weak demand in China is also a concern and it could last until the first half of next year but it's a long-term growth market anyway and investors won't be much concerned about short-term volatility in China."

China's car sales rose to 977,300 in August, according to the government-affiliated China Automotive Technology & Research Center. That compared to the 15.4 percent rise reported in July.

Still, growth was slower than in the first few months of the year when monthly auto sales had topped the 1 million units mark.

Auto sales in Japan saw their third-biggest ever monthly rise in August, led by Toyota Motor (7203.T), Honda Motor (7267.T) and others, as consumers bought before government subsidies expire at end-September. [ID:nTKC005931] [ID:nTOE68001R]

Sales at India's top three local automakers, Maruti Suzuki (MRTI.BO), Mahindra & Mahindra (MAHM.BO) and Tata Motors (TAMO.BO) rose between a quarter and a third.

India is one of the fastest growing automobile markets in the world, growing at 35 percent on average in the first four months of the current fiscal year, data from the Society of Indian Automobile Manufacturers (SIAM) showed, although that kind of momentum is not expected to be sustained.

SIAM has forecast car sales to grow 12 percent to 13 percent in the year ending March 2011, an estimate analysts see as conservative.

HYUNDAI PROBE

For South Korea's Hyundai Motor Co (005380.KS), the world's No.5 automaker along with its affiliate Kia Motor (000270.KS), last month's launch of a new upgraded Elantra compact lifted domestic sales.

The introduction of a new Sonata sedan also boosted Hyundai's sales and market share in the United States, while Chinese demand was also strong. [ID:nTOE67U04N]

One possible setback for Hyundai, a clear outperformer in the past two years, was U.S. safety regulators opening a preliminary investigation into claims that its best-selling Sonata, may have steering problems. [ID:nN31234864]

Smaller rival Ssangyong Motor Co (003620.KS), which is in bankruptcy protection and has signed a preliminary acquisition deal with India's Mahindra & Mahindra (MAHM.BO), said sales more than tripled from a year ago as its recovery was on track.

Japanese automakers are bracing for a hard-landing after subsidies disappear. The government has allocated 583.7 billion yen ($6.9 billion) for the initiative, which took effect in April 2009, and that pool looks set to run dry in less than two weeks at the current pace of registration.

"We can't tell how big the impact (of the end of subsidies) will be," said Michiro Saito, manager at the Japan Automobile Dealers Association. "We'll have to see what kind of marketing plans automakers come up with."

Sales of new cars, trucks and buses in Japan soared almost 50 percent, the third-biggest monthly rise on record, the Japan Automobile Dealers Association said. August also marked the 13th straight month of year-on-year rise.

JP Morgan auto analyst Kohei Takahashi said Japanese auto production will trend lower as the impact of subsidies wanes and as automakers opt to produce more cars overseas to limit the impact of a stronger yen.

On Wednesday, Hyundai shares closed up 1.8 percent, Toyota ended flat and Honda rose 1.1 percent. (Additional reporting by Chang-Ran Kim in TOKYO, Bharghavi Nagaraju in BANGALORE and Miyoung Kim in SEOUL; Writing by Muralikumar Anantharaman; Editing by Anshuman Daga)