China auto sales jump 78 percent in September

China's vehicle sales vaulted 78 percent in September from a year earlier, widening a lead over the U.S. as the world's top auto market, with sales spurred by tax cuts and government stimulus spending.

Overall vehicle sales totaled 1.33 million units, while passenger car sales climbed 84 percent to 1.02 million units, the China Association of Automobile Manufacturers reported.

Total sales for the first nine months of the year rose to 9.66 million units, up 34 percent from a year earlier, it said.

September was the seventh month that China's auto sales, boosted by tax cuts and subsidies as part of Beijing's stimulus, exceeded 1.1 million units. Sales in smaller cities have been booming as automakers rush to woo first-time car buyers with new models.

China leads the world in total 2009 sales, with the U.S. in second place with January-September sales at about 7.85 million units. U.S. sales fell 23 percent from a year earlier in September to just under 746,000, following a summer buying spree driven by big discounts to consumers.

Given the weakness in other major markets, global automakers are looking to China to drive revenues amid sluggish demand elsewhere.

General Motors saw total sales for January-September surge 55 percent to nearly 1.3 million vehicles. Ford Motor Co. said sales rose 32 percent in the first nine months of the year to 316,639 units, with sales in September jumping nearly 80 percent from the year before.

Other foreign automakers have reported similar, hefty double-digit sales growth.

China, with 1.3 billion people, has long been expected to overtake the United States as the biggest vehicle market. But the U.S. economic slump hastened that shift by depressing American sales while China surged ahead.

"The China market we expect to surpass the U.S. market in size for both the right and the wrong reasons," General Motors Co.'s CEO Fritz Henderson told reporters in Shanghai on Tuesday.

Henderson predicted a "very modest recovery" in 2010 for the U.S. market.

But China, he said, would continue to enjoy very strong growth.

"The China market has benefited from economic stimulus that has generated primary demand. We see substantial opportunities in product-driven, competition-driven growth," he said.