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UPDATE 1-Volkswagen says March China-HK car sales up 9 pct

* Sets monthly sales record in March boosted by govt policy

* First quarter sales rose 5.94 percent

* Revised sales forecast for China market this year (Adds quotes, details)

SHANGHAI, April 14 (Reuters) - Volkswagen VOWG.DE said on Tuesday it sold 9 percent more cars in mainland China and Hong Kong in March, setting an all-time record for monthly sales as Beijing's policy initiatives bolstered consumer confidence.

The top European automaker sold 112,466 vehicles in China and Hong Kong, up from 103,204 units in March 2008, it said in a statement.

Sales in the first quarter came to 284,143 cars, up 5.94 percent from a year earlier, it said.

“The development of the total passenger car market in the first quarter has exceeded our expectations and we benefited successfully from this growth trend,” Winfried Vahland, president and chief executive of Volkswagen Group China, said.

He added that Volkswagen had revised its sales forecast for the China market this year and increased its annual output plan by 50,000 units. Previous sales and output targets were not provided.

China’s overall auto market, the world’s largest, has received a strong boost since February from government policy support measures, including tax incentives for small cars and subsidies for vehicle buyers in rural areas.

Passenger car sales in the country hit a monthly record of 772,400 units in March, up 10.26 percent from a year earlier, official data showed. [nSHA326323]

General Motors Corp GM.N, Volkswagen's archrival in China, saw its March China sales rise 24.6 percent from a year earlier to 137,004 vehicles, setting a company record for monthly sales. [nSHA279875]

Volkswagen, which operates car ventures with SAIC Motor Corp 600104.SS and FAW Group, sold 235,772 cars under the Volkswagen brand in the first quarter in mainland China and Hong Kong, up 6.5 percent year-on-year, including imports, it said.

Deliveries for Audi models fell 4.7 percent to 29,010 units, including imports, it added.

Volkswagen said in February it planned to double its vehicle sales in the Greater China area to 2 million units by 2018 and further increase its market share in China, which currently stands at 19 percent. [ID:nSHA361640] (Reporting by Fang Yan and Jacqueline Wong)

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