* January car sales surged on holiday spending
* Low comparative base yr-ago also inflates Jan growth
* Growth seen at slower but solid 10 pct for 2010
(Adds analyst comment, details)
By Fang Yan and Jacqueline Wong
SHANGHAI, Feb 9 China's passenger car sales in
January jumped 115.5 percent from a year earlier, the country's
official industry association said on Tuesday, as car buyers
packed showrooms before the Lunar New Year.
A total of 1.32 million passenger cars were sold last month
in China, the world's largest auto market, compared with 610,600
units sold a year earlier and 1.1 million units sold in December
2009, the China Association of Automobile Manufacturers said.
"Demand remains strong in January as many people want to get
a new car for themselves for their loved ones before the Chinese
New Year," said Zhang Xin, an analyst with Guotai Junan
The week-long holiday, which starts on Feb. 14, is the
biggest shopping season for the Chinese who would spend lavishly
on items ranging from flat-screen TVs to the lastest digital
But analysts noted robust January sales growth was somewhat
distorted by a low comparative base a year earlier when car sales
declined 7.76 percent on a slowing economy at that time.
Auto sales in China rebounded strongly since April 2009
making the country a major bright spot amid a global industry
downturn thanks to Beijing's policy incentives, including a
halving of sales tax for small cars to 5 percent and subsidies
for buyers in rural areas.
To continue shoring up its auto industry, a major economic
growth engine, the government expanded its subsidies for vehicle
buyers in rural area at the beginning of 2010. The sales tax rate
on small cars, however, was increased to 7.5 percent, but was
still lower than the previous rate of 10 percent. [ID:TOE58909L]
Analysts expect auto sales will return to a slower but more
rational growth rate of roughly 10 percent in 2010 on continued
policy support from the government even though the renewed tax
incentives for small cars were not as aggressive as anticipated.
Industry executives, including Chen Hong, president of SAIC
Motor Corp (600104.SS), China's biggest automaker, remains
sanguine about the outlook for 2010, due largely to pent-up
demand in smaller cities where cars are no longer a luxury item
as wealth grows. [ID:nHKG265513]
Overall vehicle sales, including buses and trucks as well as
cars, totalled 1.66 million units in January, up 126.3 percent
from 735,500 units a year earlier, official data showed.
(Reporting by Fang Yan and Jacqueline Wong)