China's passenger cars sales in August rose 90.18 percent from a year earlier, the China Association of Automobile Manufacturers said on Tuesday, paving the way for record sales for the full year.

Industry analysts attributed the continued strength in auto sales in August largely to Beijing's stimulus measures, including aggressive cuts in sales tax for small cars and rebates for buyers in rural areas, implemented in the beginning of the year.

A total of 858,300 passenger cars were sold in August, compared with 451,300 units sold a year earlier and 832,600 units sold in July, data from the official auto association showed.

Overall vehicle sales, from trucks to buses, surged 81.68 percent in August to 1.14 million units from a year earlier, the association said, after gaining 63.57 percent in July.

Moreover, a 6.24 percent fall in car sales in August 2008 due to weakening consumer confidence amid a slowing economy, also played a role in inflating the year-on-year growth rates of last month, analysts said.

Other than an extraordinary weak H2 in 2008, resumed consumer confidence is the only reason that explains the explosive car sales in China since April, said Qin Xuwen, an industry analyst with Orient Securities.

There is no sign that the momentum is losing steam.

Growth in car sales in China slowed to single-digits in 2008 as a slowing economy and a devastating earthquake in Sichuan province dented automobile demand.

The market began to recover in February this year on improved consumer sentiment thanks to the government's policy support.

RECORD YEAR ON CARDS

Analysts said improved sentiment may also push up car sales in China, which overtook the U.S. as the world's biggest automaker in January, to record levels for the full year.

In the first eight months, a total of 6.23 million passenger cars were sold in the country, almost matching 6.76 million units sold in the whole of 2008.

Overall vehicle sales rose 29.18 percent to 8.33 units, or 89 percent of last year's total of 9.38 million units, according to official data.

Rising confidence has also given General Motors GM.UL, which recently emerged from bankruptcy, a shot in the arm.

Its vehicle sales in China, its second-largest market, jumped 112.7 percent to 152,365 units in August, with year-to-date sales rising 49.6 percent to 1.11 million units.

Kevin Wale, president and managing director for GM's China operations said he expected a more than 40 percent increase in the U.S. automakers's China sales this year, doubling a forecast he made in July.

China's biggest automaker SAIC Motor Corp (600104.SS) also gained market share after reporting 23.7 percent growth in vehicle sales in the first half.

Many other industry players, including Daimler AG's (DAIGn.DE) Mercedes-Benz unit to China's biggest SUV maker Great Wall Motor Co (2333.HK), have also expressed optimism for the second half.

(Reporting by Fang Yan and Jacqueline Wong)

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