China, India monthly car sales surge on subsidies, new models

China and India reported gains in passenger car sales in August as government subsidies, economic growth and new models from Nissan Motor Co. and Volkswagen AG spurred demand in the world’s two most populous nations.

China’s wholesale deliveries increased 18.7 percent to 1.02 million units in August, compared with 13.6 percent growth in July, the China Association of Automobile Manufacturers said today in an e-mailed statement. In India, sales reached a record for a second consecutive month as new models lured customers.

Sales at automakers including Ford Motor Co. and General Motors Co. in the two Asian countries are helping offset a demand slump in the U.S. and Europe. Ford expects industrywide car sales to rise by 5 percent to 10 percent this year, helped by strong growth in the Asian markets, according to John Fleming, head of the carmaker’s global manufacturing.

“China’s car demand will likely exceed expectations this year” said Ashvin Chotai, London-based managing director of Intelligence Automotive Asia Ltd., an industry consultant. Vehicle sales in China may reach 17 million this year, above industry forecasts of 16 million units, he said.

China’s gross domestic product grew 10.3 percent in the second quarter, the fastest among the world’s major economies, while India expanded at the fastest pace in 2 1/2 years.

Buyer Incentives

Discounts by auto dealers to clear rising inventories in China helped boost buying, said Jenny Gu, a Shanghai-based senior market analyst at JD Power & Associates. A 3,000 yuan ($442) government subsidy for energy-efficient vehicles also drove demand, she said. China, the world’s biggest polluter, introduced the government payments on June 3 to help cut smog.

Cars including Ford’s Fiesta, Hyundai Motor Co.’s Elantra and vehicles from Mazda Motor Corp., Nissan and China’s Chery Automobile Co. have been eligible for the subsidy since the middle of August, Gu said in a phone interview.

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