RPT-UPDATE 1-China Sept car sales up 19.3 pct, Q4 growth seen

Tue Oct 12, 2010 4:13am EDT

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(Repeats to fix graphic link)

* Sept car sales up 19.3 pct as peak season settles in

* Monthly car sales in Q4 seen to top 1 mln on policy worries

* Market to resume rational growth pattern (Adds analysts and executive's quotes)

By Fang Yan and Ken Wills

BEIJING, Oct 12 (Reuters) - Automakers in China shipped 19.3 percent more passenger cars to dealers in September from a year ago, official data showed, extending a rebound begun in August ahead of the peak auto sales season.

Market demand is likely to remain solid in the winter months as many people rush to buy cars before the year end on worries that Beijing may scale back or even scrap its incentives in 2011, industry observers said.

"September has always the best month for auto sales in China as people could then get behind the wheels for sight-seeing trips during the National Day holidays," said Sheng Ye, associate research director at industry consultancy Ipsos' Greater China region, referring to the week-long holiday from Oct 1.

"Demand would usually stay strong till the end of October. But uncertainty about the policy side might continue to push up sales in the fourth quarter."

Year-end marketing initiatives by automakers, eager to fulfil or surpass their annual sales targets, will also help increase traffic to showrooms nationwide, other analysts added.

"Of course it's not possible to repeat the 80 percent plus growth rate in the fourth quarter of 2009 this year. But there is no doubt that monthly car sales for the rest of the year could well exceed the 1 million mark each," said John Zeng, an analyst with J.D Power Asia Pacific said.

A total of 1.2 million sedans, sport utility vehicles and multi-purpose vehicles were shipped to dealers in September, compared with 1.02 million units a year earlier, the China Association of Automobile Manufacturers (CAAM) said on Tuesday.

That marks a further improvement from August when car sales in the country rose by 18.7 percent, rebounding from July when the market saw its slowest sales gain in 15 months.

Overall vehicle sales, which also include buses and heavy trucks, came to 1.6 million units, up from 1.3 million units a year ago.

Globally, auto sales in the United States, Europe and Japan remained stuck in low gear in September, while other emerging markets such as India raced ahead. [ID:nN01188763]

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For a Graphic on monthly China car sales:

link.reuters.com/ken97p

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SLOWER BUT RATIONAL GROWTH

Beijing unveiled a raft of policies at the beginning of 2009 to boost auto demand after a sharp market slowdown in 2008 amid a global industry meltdown.

The initiative, including tax incentives for small car buyers, has helped China eclipse the United States as the world's largest auto market by number of units in the following year.

The government has hence been seriously considering scrapping the initiatives as it wants to steer its young auto industry back into a slower but more rational growth pattern, according to Xu Changming, director of information resource department of the State Information Center.

In fact, car sales had already started to cool down in the second quarter as Beijing imposed measures to keep its economy from overheating.

Kevin Wale, president and managing director of General Motors' [GM.UL] China operation, estimated the market would expand by 10 to 15 percent in 2011. [ID:nTOE68G01Z]

GM, Wale added, would grow at least 15 percent next year in China, which has become the Detroit automaker's number-one market in the first half. (Editing by Jacqueline Wong)

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