China March car sales up 63 percent, Q2 growth to slow

Sales of passenger cars grew by almost two-thirds in China last month as buoyant consumer sentiment bolstered spending on big-ticket items in the world's third-largest economy.

But growth in what is now the world's biggest autos market is likely to slow from the current quarter as year-ago sales were strong after Beijing rolled out incentives to boost consumption along with a near $600 billion economic stimulus plan.

March sales totaled 1.26 million passenger cars, up from 942,900 sold in February, according to data provided by the China Association of Automobile Manufacturers.

January-March car sales were up 76.3 percent from a year ago, at 3.52 million.

March sales are much stronger than expected, but I don't think that will last. It will be very difficult this year to match the near doubling of monthly sales in late 2009, said Chen Lian, an analyst at Huatai Securities.

Three analysts polled by Reuters last week had projected a 30-40 percent increase in March car sales.

China has been a major bright spot for global automakers amid a sharp industry downturn, thanks to Beijing's stimulus measures that included aggressive cuts in the sales tax on small cars.

In India, too, car sales rose sharply in March, showing 20 percent year-on-year growth as customers advanced purchases ahead of price hikes. Those increases, and higher fuel prices, are likely to subdue growth this quarter.

China, where car sales sped past 10 million units for the first time last year, is a safe haven for industry giants such as General Motors, Ford Motors and Toyota Motor.

The growth in March is, however, slower than the 85.5 percent in January-February, when sales rebounded strongly from depressed year-earlier levels at the height of the economic crisis.

Analysts predict full-year 2010 growth in car sales of 10-15 percent, though one Shanghai-based dealer for GM's Chevrolet brand remained upbeat.

I've heard talk about a slowdown, but I've seen no signs of it. We sold more in April than in March and people still keep coming into the showroom, Meng Ye, a senior sales consultant, told Reuters.

For some hot-selling brands like the new Sail, our customers have to wait for weeks before getting the car. It's just hard to keep up with demand.

Across China, sales of GM Chevrolet models more than doubled to 46,139 units, according to company data.

GM, which makes cars, minivans and light commercial vehicles with big state Chinese auto groups SAIC Motor Corp and FAW Group, sold a total of 230,048 vehicles in China in March, up 67.9 percent from last year. First-quarter sales were up 71.4 percent at 623,546 units.

Shanghai-based SAIC, which on Friday said its first quarter profit quadrupled, sold 336,387 units in March, up 58 percent from a year ago. Its first-quarter sales were up 64 percent at 891,795 units.

SAIC, which also operates a car venture with Volkswagen AG, aims to move more than 3 million vehicles this year, up from 2.73 million in 2009.

Ford and its China ventures sold 153,362 vehicles in January-March, up 84 percent on last year. Toyota sales increased 39 percent to 179,000 units.

(Editing by Ian Geoghegan)

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