Geely Auto says to see car sales up 25% in '09

Chinese car maker Geely Automobile Holdings Ltd (0175.HK) is confident it can achieve 25 percent growth in car sales this year, helped in part by government support measures, its chairman said on Wednesday.

Beijing unveiled a wide-ranging plan earlier this month to boost the auto industry, including tax breaks for purchases of cars with engine sizes below 1.6 litres and subsidies to owners of high-emission vehicles who trade them in for more fuel-efficient ones.

Geely, which focuses mainly on smaller models, saw sales grow by over 25 percent in January from a year earlier, putting it on track to achieve its annual sales target despite a slowing domestic economy, company chairman Li Shufu told Reuters.

"We certainly think we can maintain this," Li said in an interview on the sidelines of the annual meeting of the World Economic Forum in the Swiss ski resort of Davos.

The Chinese auto sector has been hit hard by waning consumer confidence, with growth in sales of passenger cars slowing to 7.3 percent in 2008, the first year of single-digit growth in more than a decade.

Nationwide, sales of cars with engines below 1.6 litres will probably grow by at least 10 percent this year, Li said, because they benefit from the new policies.

"But for those above 1.6 litres, it will be very difficult," he said.

Geely is not planning on buying assets from other companies, including in North America, Li said.

"We need to do our own things well before we can start thinking of other things," he said.

To help drive sales, Geely plans to launch eight new cars this year, including four upgraded models, the company has said.

Li said he did not think the conditions were right for consolidation in the Chinese auto sector. In launching its aid to the sector, the State Council, or cabinet, said it hoped to encourage consolidation.

"Right now, everybody is able to survive. Acquisitions usually only happen when some company gets into trouble," he said.