China experienced its strongest auto sales growth for six months in October as government incentives for fuel-efficient cars saw consumers flocking to showrooms.

Figures published by the China Association of Automobile Manufacturers suggested that wholesale deliveries of cars, sport-utility and multi-purpose vehicles rose by 27 per cent to 1.2 million.

In addition, the body noted that the country's overall vehicle sales, including buses and trucks, increased by 25 per cent to 1.54 million units.

The world's largest auto market introduced a 3,000 yuan subsidy for buyers of energy-efficient models in June in a bid to reduce the level of pollution from its vehicles.

Xu Minfeng, an analyst at Central China Securities Holdings, told Bloomberg that the spike in sales in October could be linked to consumers' concerns about how long the incentives will remain in place.

General Motors (GM), which is the largest overseas automaker operating in China, confirmed that its sales in the country increased by 19.6 per cent during the month.

The Detroit-based giant sold 199,641 units, with its Buick, Chevrolet and Cadillac models proving particularly popular among buyers.

Meanwhile, a similarly encouraging picture emerged in the US - which is the world's second largest auto market - with new vehicle sales reaching a two-year high.

Industry-wide sales increased by 13.4 per cent on a year-on-year basis, with GM, Ford and Chrysler posting gains of 3.5 per cent, 19.2 per cent and 37 per cent respectively.

Smaller firms such as Hyundai, Kia and Subaru enjoyed their best ever performance for October, with sales surging by more than 25 per cent.

Toyota, the world's largest automaker, was the only major group which failed to capitalise over the course of the month, witnessing a sales drop of 4.4 per cent.

"Signs are there that the recovery continues and that it will be sustained. We don't see a big risk at all of a double dip," Don Johnson, GM's Vice President for US Sales Operations, told the New York Times.

However, the signs were not so positive in Japan, with sales declining by 23.2 per cent, or 26.7 per cent without 660cc minicars, according to the Japan Automobile Dealers' Association (JADA).

The poor performance, which was the worst October recorded in the country for 42 years, could be attributed to government subsidies for replacing older cars expiring in September.

Nissan registered a sales fall of 30.6 per cent, excluding minicars, with Honda, Mazda and Toyota experiencing decreases of 29.9 per cent, 52.5 per cent and 24.7 per cent respectively.

"We have no way of telling how weak demand will be in coming months," said Michiro Saito, a manager at the JADA, in an interview with Reuters.

"[But] many dealers were fearing bigger falls of 30 to 40 per cent, so in that sense we're a bit relieved."

In India, which is one of the world's fastest-growing auto markets, double-digit sales growth was maintained in October as the booming economy continues to aid manufacturers.

The country's largest automaker, Maruti Suzuki, posted a sales improvement of 39 per cent on a year-on-year basis, with Tata Motors registering a 21 per cent increase.

According to the Society of Indian Automobile Manufacturers, India's auto industry is likely to expand by between 18 and 20 per cent in the financial year to the end of March 2011.

Korean automakers also enjoyed a record-breaking month, as Hyundai saw its sales rise by 10.4 per cent at home and abroad, while Kia witnessed an overall sales jump of 29 per cent.

Michael Sohn, an analyst at Macquarie Securities, expressed his belief in a Reuters interview that "things cannot be better" for the companies involved in the emerging Asian market.

"Korean automakers are expected to log higher profits than Japanese peers this year, but their valuations are cheaper than Japanese makers," he told the news provider.

"I expect rallies of Korean automakers to continue for the time being."

Meanwhile, in Germany, new car registrations dropped by 20 per cent on a year-on-year basis to 256,775 units in October, representing the 11th straight monthly decline.

Europe's largest auto market is now effectively selling vehicles at the same rate as in October 2008, but the latest figure is still an improvement from the falls seen between March and August this year.

Industry federation VDA predicted that domestic new car sales for 2010 would surpass 2.9 million, although this would be 23 per cent lower than the total recorded in 2009.

Moving to the UK, new car sales reached 131,495 during the month, representing a decrease of 22.2 per cent from the equivalent period last year, when a scrappage scheme was still in place.

However, the Society of Motor Manufacturers and Traders (SMMT) also revealed that registrations for the first ten months of the year have improved by 4.8 per cent to more than 1.76 million.

The body predicted that the picture is unlikely to improve in the remainder of the year, although it noted that the full-year sales total should exceed two million with a 1.5 per cent rise from 2009.

"There was a significant fall in October's new car registrations, reflecting the impact of the scrappage scheme at this time last year and some deterioration in consumer confidence," said SMMT chief executive Paul Everitt.

"The industry expects the coming months to be challenging with slow, but steady, economic growth feeding through to improved confidence and demand during 2011."

In France, sales declined by 18.7 per cent to 171,449 units, according to industry association CCFA, as the country's reduced €500 subsidy failed to prevent a fall.

Passenger sales were down by 1.4 per cent in the first ten months of the year, with CCFA predicting that the figures for November and December will be "even worse".

"With the end of scrapping schemes, the French and European markets are returning to their fundamentals, and these are not dynamic," Flavien Neuvy, head of the automobile industry research department at consumer credit firm Cetelem, told Reuters.

"Drivers drive less and less, cars are more and more reliable and customers keep them longer and longer - eight and a half years on average."

An equally grim scenario emerged in Spain, with ANFAC claiming that sales dipped by 37.6 per cent year-on-year, compared to a 26.9 per cent drop in September.

The Spanish government's car scrappage scheme came to an end in July, at the same time as a rise in VAT, meaning the auto industry is struggling to match sales volumes from 2009.

And finally, Italian car sales declined by 28.82 per cent to 139,740 units in October, according to the country's transport ministry.

"Only in the major crisis of 1993 and in the darkest period of the current crisis - from the end of 2008 to the beginning of 2009 - have steeper falls been recorded," read a statement from industry thinktank Promotor.

Sources:



Korea, India car makers see strong Oct sales, Japan hit (01/11/10)



Japanese Vehicle Sales Plunge In October/Toyota, Honda Lead Second Straight Monthly Drop in Japan's Vehicle Sales (01/11/10)



German car market shrinks in Oct-source (02/11/10)



German auto body raises 2010 outlook despite October drop (02/11/10)



French and Spanish car sales plunge in October (02/11/10)



For Automakers, Strong Sales in October (03/11/10)



New car sales drop 22.2% in October (04/11/10)



GM China October Sales Rise 19.6% on Buick, Chevrolet, Cadillac Car Demand (04/11/10)



China Passenger-Car Sales Grow at Quickest Pace Since April on Incentives (09/11/10) 

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