* Car franchiser Zhongsheng seeks up to $1 bln in Q1

* Machinery maker IMM targets $250-500 mln IPO by Feb (Adds details, background)

HONG KONG, Jan 5 - Two Chinese companies are targeting up to a combined $1.5 billion from initial public share offerings in Hong Kong in the first quarter, reinforcing the fundraising wave that made it the world's No.1 IPO market in 2009.

Chinese automobile franchiser Zhongsheng Group aims to raise between $800 million and $1 billion from a Hong Kong IPO in first quarter of 2010, sources close to the deal said on Tuesday, aiming to tap robust growth in the country's auto market, now the world's largest.

Zhongsheng, based in the Chinese port city of Dalian, mainly provides sales, spare parts, services and surveys businesses for major international automobile brands.

The final size and timetable (of the IPO) will be determined by market conditions, one of the sources said.

Morgan Stanley (MS.N) and UBS (UBSN.VX) are handling Zhongsheng's IPO, said the sources.

Zhongsheng operates about 40 automobile franchise outlets for marques including Lexus, Audi, Nissan and Toyota, according to the company's website.

Separately, International Mining Machinery Ltd (IMM), a Chinese mining equipment company, aims to raise between $250 million and $500 million from a Hong Kong IPO by February, sources close to the plan said.

The final size of IMM's IPO would depend on the market environment, the sources added.

IMM, backed by private equity firm The Jordan Company (TJC), was established in 2006 to acquire Jixi Coal Mining Machinery Co Ltd and Jiamusi Coal Mining Machinery Co Ltd from state-owned Heilongjian Coal Mining Machinery Group Co Ltd.

IMM plans to seek Hong Kong listing committee approval in the middle of January, and aims to list next month, a source close to the deal said.

UBS (UBSN.VX) and BOC International were handling IMM's IPO, the sources said.

The sources declined to be identified as they were not authorised to speak to the media.

NEW IPO WAVE

Hong Kong was the world's No.1 IPO destination in 2009 and analysts expect the trend to continue in 2010, mainly driven by Chinese companies keen to expand overseas or boost domestic sales.

The global auto industry has changed dramatically during the past year's financial crisis. Global carmakers such as Volkswagen (VOWG.DE) and General Motors [GM.UL] are stepping up their presence in China, which overtook the United States as the world's largest auto market this year.

Auto sales in China, including commercial sales, have more than doubled since 2005, rising to near 13 million units in 2009 from 5.76 million just four years ago.

By contrast, the U.S. market plunged from 16.95 million vehicles in 2005 to near 10.4 million in 2009.

In early December, Beijing said it would subsidise sales of green vehicles in some cities as the Hu Jintao administration steps up efforts to promote environmentally friendly vehicles to cut fuel emissions and boost domestic consumption - key to maintaining China's economic growth.

Stimulated by China's automobile subsidy policies, shares of Chinese carmakers have surged in the past year, including Geely (0175.HK) and Brilliance China Automotive (1114.HK), which jumped 578 percent and 441 percent, respectively. (US$1=HK$7.75) (Editing by George Chen and Chris Lewis)

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