Seoul/Beijing: 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 per cent for the month, a sharp improvement from the sales rise seen in July.
Runaway growth has been tapering in the world's second-largest economy since the second quarter as the government slams the brakes to keep the economy from overheating.Industry executives and analysts are cautious about the demand outlook for the rest of the year.
South Korean automaker Hyundai Motor Co posted double-digit sales growth aided by new car launches, but it faces uncertainty after US officials launched a safety investigation over its best selling car in America.
"Overall sales growth in the United States is already slowing down and consumers who only need to replace their aged models are buying," said Kevin Lee, an analyst at Shinhan Investment in Seoul.
‘Sharp reduction'
"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 Centre. That compared to the 15.4 per cent rise reported in July. Still, growth was slower than in the first few months of the year when monthly auto sales topped the one million 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.
For Hyundai, the world's No.5 automaker along with its affiliate Kia Motor, last month's launch of a new upgraded Elantra compact lifted domestic sales.
The launch of a new Sonata sedan also boosted Hyundai's sales and market share in the US.
US safety regulators have opened a preliminary investigation into claims that Sonata may have steering problems, government officials said on Tuesday.
Acquisition deal
Smaller rival Ssangyong Motor Co, which is in bankruptcy protection and has signed a preliminary acquisition deal with India's Mahindra & Mahindra, said sales more than tripled from a year ago as its recovery was on track. But vehicle sales edged down 11 per cent from the previous month.
Japanese automakers are bracing for a hard-landing after subsidies disappear. The government has allocated 583.7 billion yen for the initiative and that pool looks set to run dry in less than two weeks.
- 15.4% rise in Chinese car sales reported in July
- $6.9b in automaker subsidies allocated by Japan
