WRAPUP 2-Asia automakers post robust Aug sales, demand may slip

* China Aug car sales 977,000, up 59.3 pct yr on yr

* Hyundai sales up 17 pct yoy but down 2.2 pct vs July

* U.S. launches safety probe on Hyundai Sonata

* Auto sales in Japan up 46.7% yoy, excluding mini vehicles

* Sale of top Indian automakers rise 24-32 pct
(Adds detail on Indian automaker sales)

By Hyunjoo Jin and Fang Yan

SEOUL/BEIJING, Sept 1 (BestGrowthStock) – Asian auto sales rose
strongly in August, benefiting from government moves to
encourage purchases of new and cleaner vehicles, though an
uncertain U.S. 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 percent for the month, a sharp
improvement from the sales rise seen in July. [ID:nBJB003929]

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 percent 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 (7203.T: ), Honda Motor
(7267.T: ) and others, as consumers bought before government
subsidies expire at end-September. [ID:nTKC005931]
[ID:nTOE68001R]

Sales at India’s top three local automakers, Maruti Suzuki
(MRTI.BO: ), Mahindra & Mahindra (MAHM.BO: ) and Tata Motors
(TAMO.BO: ) rose between a quarter and a third.

India is one of the fastest growing automobile markets in
the world, growing at 35 percent 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 percent to 13
percent in the year ending March 2011, an estimate analysts see
as conservative.

HYUNDAI PROBE

For South Korea’s Hyundai Motor Co (005380.KS: ), the world’s
No.5 automaker along with its affiliate Kia Motor (000270.KS: ),
last month’s launch of a new upgraded Elantra compact lifted
domestic sales.

The introduction of a new Sonata sedan also boosted
Hyundai’s sales and market share in the United States, while
Chinese demand was also strong. [ID:nTOE67U04N]

One possible setback for Hyundai, a clear outperformer in
the past two years, was U.S. safety regulators opening a
preliminary investigation into claims that its best-selling
Sonata, may have steering problems. [ID:nN31234864]

Smaller rival Ssangyong Motor Co (003620.KS: ), which is in
bankruptcy protection and has signed a preliminary acquisition
deal with India’s Mahindra & Mahindra (MAHM.BO: ), said sales
more than tripled from a year ago as its recovery was on track.

Japanese automakers are bracing for a hard-landing after
subsidies disappear. The government has allocated 583.7 billion
yen ($6.9 billion) for the initiative, which took effect in
April 2009, and that pool looks set to run dry in less than two
weeks at the current pace of registration.

“We can’t tell how big the impact (of the end of subsidies)
will be,” said Michiro Saito, manager at the Japan Automobile
Dealers Association. “We’ll have to see what kind of marketing
plans automakers come up with.”

Sales of new cars, trucks and buses in Japan soared almost
50 percent, the third-biggest monthly rise on record, the Japan
Automobile Dealers Association said. August also marked the
13th straight month of year-on-year rise.

JP Morgan auto analyst Kohei Takahashi said Japanese auto
production will trend lower as the impact of subsidies wanes
and as automakers opt to produce more cars overseas to limit
the impact of a stronger yen.

On Wednesday, Hyundai shares closed up 1.8 percent, Toyota
ended flat and Honda rose 1.1 percent.
(Additional reporting by Chang-Ran Kim in TOKYO, Bharghavi
Nagaraju in BANGALORE and Miyoung Kim in SEOUL; Writing by
Muralikumar Anantharaman; Editing by Anshuman Daga)

WRAPUP 2-Asia automakers post robust Aug sales, demand may slip