WRAPUP 1-Japan car sales jump on stimulus, Hyundai soars

* Japan March car sales soar 24 pct but fundamentals weak

* Hyundai global sales up 36 pct on new models

* China sales seen up 30-40 pct in March – analysts

* Hyundai shares touch record high after sales data

By Chang-Ran Kim and Kim Yeon-hee

TOKYO/SEOUL, April 1 (BestGrowthStock) – Japanese auto sales jumped
by a quarter in March to cap a business year that relied
heavily on government incentives, while South Korea’s Hyundai
Motor (005380.KS: ) continued to rack up impressive sales growth,
sending its shares to a record high.

With demand expected to shrink as more Japanese move to
urban areas well served by public transportation, local
automakers such as Toyota Motor Corp (7203.T: ), Honda Motor Co
(7267.T: ) and Nissan Motor Co (7201.T: ) are turning to overseas
markets for growth.

But they face tough competition from Hyundai, whose sales
in March defied the end of government subsidies at home to
surge by more than a third globally thanks to new model
launches and strong overseas demand. [ID:nTOE62U04J]

“South Korean automakers are simply doing superbly,” said
Kang Sang-min, an analyst at Hanwha Securities. “March
seasonally is not a strong month, but they still managed to
post such strong rises thanks to good new models and lagging
performance by competitors like Toyota.”

Shares in Hyundai, with affiliate Kia Motors (000270.KS: )
the world’s fourth-largest automaker, jumped as much as 5.6
percent to match the record high they hit last December.

Japanese auto shares were little moved, with the transport
equipment sub-index (.ITEQP.T: ) dipping 0.2 percent.

“NOTHING TO REJOICE” IN JAPAN

Led by Toyota, Japanese sales of new cars, trucks and
buses, including 660cc minivehicles, soared 24 percent last
month to 674,494 vehicles, helped by an extra selling day
compared with last March.

Toyota’s March sales, excluding minivehicles, rose 53
percent in Japan, where its recalls have been limited to
braking glitches on new hybrid models such as the latest Prius.
Nissan sales rose 24 percent and Honda’s gained 34 percent.

Annual Japanese sales grew 10 percent to 3.182 million
vehicles for the business year that ended on March 31, marking
the first double-digit rise in two decades. [ID:nTOE63001W]

But officials said the 12-month tally was still the
fifth-lowest on record, bouncing back from an especially weak,
crisis-hit year with the help of tax incentives and subsidies
on low-emission cars since last year.

“These figures are nothing to rejoice about,” said Michiro
Saito, an official at the Japan Automobile Dealers Association.

Demand in the 2010/11 business year is expected to fall 4.9
percent to 4.65 million vehicles, the Japan Automobile
Manufacturers Association said last month, in what would mark a
33-year low. [ID:nTFD006339]
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^ For graphic on Japan auto sales;
http://link.reuters.com/cuh26j
For graphic on Hyundai sales; http://link.reuters.com/duh26j
For graphic on China auto sales;
http://link.reuters.com/fuh26j
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
^

U.S., CHINA EYED

Hyundai said it sold 317,973 vehicles last month, up 36
percent from a year ago. Affiliate Kia sold 173,095 units in
March, up 55 percent. [ID:nSEL002982]

The monthly results eased concerns that aggressive
discounting from Toyota could put a dent in Hyundai’s sales
growth in the United States.

The upgraded Sonata sedan and Tucson SUV led Hyundai’s
growth, bringing its U.S. plant in Alabama to run nearly at
full capacity for the first time since production began in
2005, analysts said.

Analysts said the industry would likely post a sharp rise
in U.S. auto sales in March, supported by hefty incentives to
match Toyota’s as the Japanese automaker sought to repair an
image tarnished by a series of recalls. [ID:nN29109504]

Demand is also expected to have soared in China in March,
fuelled by a humming economy and policy incentives. Three
analysts surveyed by Reuters expect a 30-40 percent rise in
monthly sales, due for release next week. [ID:nTOE62U00K]

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(Additional reporting by Jungyoun Park in SEOUL, Fang Yan and
Jacqueline Wong in SHANGHAI; Editing by Lincoln Feast)

WRAPUP 1-Japan car sales jump on stimulus, Hyundai soars