Passenger car sales in China increased in July as consumers took advantage of new subsidies for fuel-efficient models and discounts from dealers.

Figures produced by the China Automotive Technology and Research Center suggested that 822,300 vehicles were sold during the month, representing a year-on-year rise of 15.4 per cent.

This compares to growth of 10.9 per cent in June, but the group told Bloomberg that the upcoming months could be more problematic as inventories are building up.

Unsold vehicles increased to almost 1.5 million units in the first seven months of the year, up from just under one million units in the period between January and April.

Sheng Ye, Associate Research Director for Greater China at Ipsos, predicted that the remainder of the year will be tough for the world's largest auto market.

"Auto sales have always been slow in the summer. But an extraordinary strong 2009 and worries about the economy are also to blame," he said in an interview with Reuters.

"We might see more traffic at showrooms by autumn, but it won't be anything close to the packed showrooms and explosive sales we saw in 2009."

Separate statistics published by the China Association of Automobile Manufacturers showed that 1.24 million vehicles were sold in the country during July.

This represents a 14.42 per cent rise from the equivalent period in 2009, but a decline of 11.9 per cent from the total for June.

According to the body, cars with engines of 1.6 litres and below accounted for 65.38 per cent of overall passenger vehicle sales - the fifth month in a row this figure has been lower than last year's average of 69.5 per cent.

Meanwhile, the US enjoyed its best month for auto sales since the 'Cash for Clunkers' incentive scheme in August 2009.

Figures from Autodata revealed that 1.05 million vehicles were sold in July, up by five per cent on a year-on-year basis, with a seasonally-adjusted annual sales rate of about 12 million units.

Although the body claimed that this was the second highest volume since the start of the economic crisis in September 2008, it is also noted that lower-priced fleet sales played a major part.

Jesse Toprak, an analyst at auto pricing website Truecar.com, explained that automakers "can't get out of first gear" at present as consumers largely stay away from showrooms.

"Clearly there's hesitation from consumers to pull the trigger," he told CNN Money.

"There are signs of life in these numbers, but it's plankton, not anything big."

General Motors posted an overall sales improvement of five per cent, with a 25 per cent rise for the four brand it continues to sell - Chevrolet, Buick, GMC and Cadillac.

Ford also enjoyed a five per cent jump, although the figure was short of analysts' forecasts and does not include a 32 per cent drop in sales at Volvo, which it recently sold to Chinese automaker Geely.

Chrysler, the other Detroit-based 'Big Three' automaker, recorded a five per cent rise as well, mainly as a result of great sales of its Jeep vehicles, and the Wrangler in particular.

Toyota posted a sales decline of three per cent, while Honda revealed a fall of two per cent, Nissan reported a 19 per cent rise and Hyundai witnessed a 19 per cent increase.

"People are being cautious," said Jessica Caldwell, Senior Analyst at Edmunds.com, in an interview with CNN Money.

"Unless they have to buy a new car, they are not wanting to spend money. There were good deals this month, but they're just watching to see where it goes."

Elsewhere, the Japan Automobile Dealers' Association revealed that 333,403 vehicles were sold in the country in July, representing a year-on-year rise of 15 per cent.

Japan has now witnessed 12 straight months of sales improvements, with Toyota and Honda leading the latest increases.

In India, which is one of the world's fastest-growing auto markets, domestic car sales rose by 38 per cent to a record 158,764 units, according to the Society of Indian Automobile Manufacturers.

The impressive performance is being attributed to strong demand in rural areas and the growing willingness of banks and finance firms to provide credit for buying cars.

Darius Lam, an analyst at JD Power, explained that global automakers are also increasingly viewing India as an ideal market for their small cars.

"There are a lot of new models in the B segment, like Volkwagen's Polo, Nissan's new Micra and Ford's Figo, and it has really given a big boost to the numbers in the first six months of this year," he told the Financial Times.

Moving to Europe, 136,446 new cars were sold in the UK last month, which was 13.2 per cent lower than the figure for July 2009 and the first drop for a year.

The Society of Motor Manufacturers and Traders (SMMT) claimed that the disappointing total can partly be attributed to the conclusion of the car scrappage incentive scheme.

However, January to July sales reached 1.24 million - a year-on-year rise of 15.1 per cent - and the body said it expects full-year sales to increase by 1.2 per cent to 2.02 million.

"A drop in private registrations compared to the scrappage-fuelled months of 2009 was expected and has brought the first market decline for 12 months," said SMMT Chief Executive Paul Everitt.

"Subdued consumer confidence and a still fragile economic recovery make the outlook for the remainder of 2010 challenging, but a stronger than expected first half means full-year volumes are still forecast to exceed 2009's total."

Meanwhile, the CCFA carmakers' association revealed that new passenger car registrations in France declined by 12.9 per cent to 169,804 units.

The figures were again influenced by the country's scrappage scheme, which was cut further from €700 to €500 on July 1st.

Spanish new car sales were down by 24 per cent to 82,167, with ANFAC - the body which supplied the data - predicting a fall of more than 30 per cent in the second half.

Transport ministry statistics in Italy showed that sales were 25.97 per cent lower at 152,752 units, while Belgium recorded a 9.5 per cent improvement to 39,909 units.

In the continent's largest auto market, Germany, new car registrations fell by about 30 per cent, a source close to the VDIK foreign carmakers' group told Reuters.

With the country's incentive scheme also now finished, registrations in the first seven months dropped by 29 per cent in comparison to the same period last year.

The picture was far more positive in Russia, where car sales reached 173,171 units, which was narrowly below the June total of 174,838 but 48 per cent higher than the July 2009 figure.

According to the Association of European Businesses (AEB), the improvement can be explained by the extension of the country's scrappage scheme and its ongoing economic recovery.

However, Martin Jahn, Vice-President of Volkswagen and a member of the AEB, warned that such impressive results may not continue for the remainder of the year.

"In August and September there may be some slowdown due to holidays on the majority of Russian factories as well as emergency weather conditions in several regions of central Russia," he told Reuters.

And finally, Fenabrave, the Brazilian national automobile dealership association, announced that auto sales in the country rose by 15.27 per cent to 285,299 vehicles.

Brazil's economy has been recovering well in recent months and consumers have been taking advantage of automaker discounts and the greater availability of credit.

In a report quoted by the Wall Street Journal, a team of Goldman Sachs economists described the figures as "encouraging".

"It shows that vehicle sales are rebounding after a temporary decline in the second quarter driven by the removal of IPI tax breaks," they said.

"The recovery in demand for vehicles is supported by abundant credit availability [at low rates and lengthy maturities for auto loans] and solid labour market conditions."

Brazilian auto sales in the first seven months of the year reached 1.67 million, which was a rise of 6.82 per cent from the equivalent period in 2009.

Sources:



Passenger-Car Sales in China Increase 15.4% to 822,300 Vehicles Last Month (02/08/10)



Toyota, Honda Lead Gains in Japanese Auto Sales as Subsidy Boosts Demand (02/08/10)



U.S. Auto Sales May Reach 2010 High in July as Closeout Deals Lure Buyers (02/08/10)



China and Japan lead Asian car sales rises (02/08/10)



Europe car sales drop in July as govt aid phases out (02/08/10)



German July new car sales down 30 pct - source (03/08/10)



Brazil July Auto Sales Rise On Discounts, Credit (03/08/10)



U.S.A.: Most automakers post July sales gains (03/08/10)



U.K.: July sees fall in new car sales (05/08/10)



China July auto sales slow; India at record high (09/08/10)



Russia July car sales soar 48 pct, may slow (09/08/10)



Rural demand drives India car sales record (09/08/10)



China: Low emission cars not finding buyers (10/08/10) 

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