Asia automakers post robust Aug sales, demand may slip

Asian auto sales rose strongly in August, benefiting from government moves to encourage purchases of new and cleaner vehicles, though an uncertain US economy and slowing growth in China look set to curb demand.

In China, the world's biggest auto market, passenger car sales jumped almost 60% for the month, a sharp improvement from the sales rise seen in July.

Major automakers in the fast-growing Indian market also reported robust sales, but global industry executives and analysts are cautious about the demand outlook for the rest of the year, given economic concerns in major markets.

"Overall sales growth in the United States is already slowing down and only consumers who need to replace their aged models are buying," said Kevin Lee, an analyst at Shinhan Investment in Seoul. "It could slow down further but a sharp reduction is unlikely as the economy is believed to be better than during the financial crisis."

"Weak demand in China is also a concern and it could last until the first half of next year but it's a long-term growth market anyway and investors won't be much concerned about short-term volatility in China."

China's car sales rose to 977,300 in August, according to the government-affiliated China Automotive Technology & Research Center. That compared to the 15.4% rise reported in July.

Still, growth was slower than in the first few months of the year when monthly auto sales had topped the 1 million units mark.

Auto sales in Japan saw their third-biggest ever monthly rise in August, led by Toyota Motor, Honda Motor and others, as consumers bought before government subsidies expire at end-September.

Sales at India's top three local automakers, Maruti Suzuki, Mahindra & Mahindra and Tata Motors rose between a quarter and a third.

India is one of the fastest growing automobile markets in the world, growing at 35% on average in the first four months of the current fiscal year, data from the Society of Indian Automobile Manufacturers (SIAM) showed, although that kind of momentum is not expected to be sustained.

SIAM has forecast car sales to grow 12% to 13% in the year ending March 2011, an estimate analysts see as conservative.