March 9, 2010 / 3:13 AM / in 8 years

UPDATE 3-China car sales rise 55 pct in Feb; policy supports

* Feb growth moderates from 116 pct in Jan, still robust

* Timing of Lunar New Year largely behind moderation

* SAIC’s combined Jan/Feb vehicle sales up 67 pct y/y

* SAIC shares fall 0.2 pct in market up 0.5 pct (Recasts with nationwide figures, adds details, analyst quotes)

By Fang Yan and Jason Subler

SHANGHAI, March 9 (Reuters) - China’s passenger car sales in February rose 55 percent from a year earlier, the official industry association said on Tuesday, as policy incentives continued to lure buyers into showrooms during the holidays.

Buoyant consumer spending in China, the world’s largest auto market, has helped global car manufacturers combat a downturn in their traditional markets.

Top automaker SAIC Motors (600104.SS) said its vehicle sales rose nearly 46 percent in February to more than 248,000 units, in line with the increase in nationwide vehicle sales, which also include buses and trucks.

February industry sales of 942,900 passenger cars, however, paled in comparison with the 1.32 million cars sold in January as consumers bought big-ticket items before the week-long Lunar New Year holiday, which began on Feb. 14 this year.

“February sales are still pretty solid given the circumstances. It’s unrealistic to expect a doubling of sales every month,” said John Zeng, an analyst with IHS Global Insight.

“However, growth will be slower especially in the second half given the explosive sales in latter part of last year.”

Chinese automakers’ vehicle sales in the first two months of the year are skewed by the timing of the Lunar New Year, which came in January last year, making the single-month figures volatile.

SAIC's February sales growth was only half that of January, similar to the nationwide figures. SAIC shares fell 0.2 percent in a Shanghai market .SSEC that rose 0.5 percent.

China’s No. 3 automaker, Dongfeng Motor Group Co (0489.HK), a China partner of Honda Motor (7267.T), Nissan Motor (7201.T) and PSA Peugeot-Citroen (PEUP.PA), reported a similar pattern of strong but slowing sales growth. It sold 119,082 vehicles last month, up 51 percent, company data showed on Tuesday. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Table on Feb auto sales, including breakdown [ID:nTOE624046]

Graphic on China's car sales ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>


    China overtook the United States as the world’s largest auto market last year and has continued to be a leading bright spot for the battered global industry this year due to Beijing’s stimulus steps, including subsidies for vehicle buyers in rural areas and tax incentives for small cars.

    Those measures, which helped send General Motors’ [GM.UL] China vehicle sales to fresh monthly records in 2009, are continuing to boost the market this year.

    GM, which make cars, minivans and light commercial vehicles with SAIC and FAW Group, sold 174,306 vehicles in the country in February, up 51 percent on a year earlier.

    Rival Ford Motor’s (F.N) China venture, with Chongqing Changan Automobile Co (000625.SZ) and Mazda Motor (7261.T), sold 18,193 Ford brand passenger cars last month, marking 37.5 percent growth from the year-ago level.

    Toyota Motor (7203.T), which saw a 8.7 percent fall in vehicles in the United States due to the safety crisis in February, saw a roughly 30 percent increase in sales in China to 45,500 units, company data showed.

    Analysts expect auto sales will return to a slower but more sustainable growth rate of roughly 10 percent in 2010 after explosive growth in 2009, buoyed by continued policy support from the government although renewed tax incentives for small cars were not as aggressive as anticipated.

    Industry executives, including SAIC President Chen Hong, remain sanguine about the outlook for 2010, citing pent-up demand in smaller cities where cars are no longer a luxury item as wealth grows. [ID:nHKG265513]

    The Shanghai-based automaker aims to sell 3 million vehicles this year, its chairman Hu Maoyuan has said, marking over 10 percent growth compared with 2009. [ID:nTOE60O01Z] (Additional reporting by Farah Master and Lu Jianxin; Editing by Jacqueline Wong and Lincoln Feast)

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