GM says sales drop 25 percent, sees slower recovery

Asian auto sales soared in August, boosted by government incentives although U.S. economic uncertainty and slowing growth in China look set to curb demand, while in Europe car sales fell as scrapping bonuses ran out.

French, Spanish and Italian car sales fell, as scrapping incentives are fading or have run out in those markets.

U.S. automaker General Motors GM.UL reported vehicle sales in August fell 24.9 percent to 185,176 units and said mixed economic indicators suggested a slower recovery.

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.

But runaway growth has been tapering in the world's number two economy since the second quarter as the government tries to stop the economy overheating, and executives are cautious about the outlook for the rest of the year.

South Korean automaker Hyundai Motor Co (005380.KS) posted double-digit sales growth aided by new car launches, but it faces uncertainty after U.S. officials launched a safety investigation over its best selling car in America, the Sonata sedan.

"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.

"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."

Full story