Sales of luxury cars get boost from China in Sept

China continued to offer some relief to the world's biggest luxury-car makers in September, with sales soaring from a year earlier thanks to new models and a robust economy bolstered by government stimulus programs.

BMW AG, Daimler AG's Mercedes-Benz brand and Volkswagen AG's Audi nameplate are racing to increase their footprints in China to benefit from the market's growth potential and reduce their reliance on sales in Western Europe and the U.S.

Audi's sales in China rose 37% in September from a year earlier to more than 15,000 vehicles, a monthly record, according to the Ingolstadt, Germany-based auto maker. In the January-to-September period, Audi's China sales totaled 108,859 vehicles, up 20% from a year earlier.

Audi ranks third behind BMW and Mercedes-Benz in global sales, but is keeping a firm grip on the top position in China, partly thanks to the early market entry by parent VW.

Audi is "on course for a new record year" in China, said executive board member Peter Schwarzenbauer. The company wants to win over more Chinese customers by expanding the range of locally built cars, such as the Q5 small sport-utility-vehicle.

While the industry has been hard hit by shrinking demand amid the recession, China has proved to be one of the few bright spots for auto makers. The appetite for cars continues to grow there, helped by a wide-ranging economic stimulus package.

A move to halve the purchase tax on vehicles with engines of 1.6 liters or less -- to 5% -- has fostered demand, particularly for smaller cars.

In the January-to-August period, passenger-vehicle sales in China jumped 37% to 6.23 million units, according to the China Association of Automobile Manufacturers, while total vehicle sales rose 29% to 8.33 million units.

But some analysts say the tax break has borrowed from future demand and sales may collapse when it expires at the end of 2009.

Munich-based BMW, the world's largest luxury-car maker by sales, sold 7,628 BMW-brand vehicles in China last month, up 35% from a year earlier, a spokesman said. In the year's first nine months, sales rose 32% from a year earlier to 59,460.

The Mercedes-Benz brand narrowed the gap last month with 6,800 cars sold in China, up 56% on the year. The higher monthly growth rate than its rivals mainly was due to strong demand for the revamped E-Class and flagship S-Class models, a company spokeswoman said.

The Stuttgart, Germany-based company sold 45,400 cars in China through September, up 41% compared with the same period of 2008.

Daimler Chief Executive Dieter Zetsche said in an interview last week that Mercedes could ramp up production in China by accessing the entire capacity of its former alliance partner Chrysler Group LLC, following the end of joint operations with its former U.S. unit.