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 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.

China's car sales rose to 977,300 in August, according to the government-affiliated China Automotive Technology & Research Center. That compared to the 15.4 percent rise reported in July.

Still, growth was slower than in the first few months of the year when monthly auto sales topped the 1 million units mark.

Sales at India's top three local automakers, Maruti Suzuki (MRTI.BO), Mahindra & Mahindra (MAHM.BO) and Tata Motors (TAMO.BO) rose between a quarter and a third.

India is one of the fastest growing automobile markets in the world, growing at 35 percent on average in the first four months of the current fiscal year, data from the Society of Indian Automobile Manufacturers (SIAM) showed.

But that momentum is not expected to last.


Italy's new car sales fell 19.3 percent to 68,718 units in August, the Transport Ministry said, while Fiat's market share was back above its target at 30.65 percent.

In May, Fiat's market share fell below its 30 percent target for the first time since December 2005.

Italy's new car sales totaled 68,718 units, as the loss of incentives to buy less-polluting cars -- a Fiat strength -- continued to take its toll.

This is another very negative result after those in the past months... And expectations for 2011 are terrible, Filippo Pavan Bernacchi, chairman of the Italian car dealers association Federauto said in a statement.

More than half of Italian car dealers will report a strong loss in 2010 and many will be forced to close down, he said.

In Belgium, which had no scrapping incentive scheme, car sales rose 24.8 percent in August, or 17.1 percent in the first eight months, prompting the auto federation (Febiac) to raise its 2010 forecast to an 8 percent gain from a previous 1-3 percent.

Febiac said car sales growth would fade in the coming months due to reduced incentives for buying lower-emission cars.

In France, passenger car sales fell 9.8 percent in August, returning the market to pre-scrappping scheme levels, a CCFA spokesman said.

We're back to a level similar to that of August 2009... we should end the year at over 2 million vehicles, he added.

Flavien Neuvy, head of the automobile industry research unit at French consumer credit organization Cetelem, agreed.

There is no longer a scrapping effect. There is still a scrapping incentive (of 500 euros until the end of the year) but evidently it is no longer much use, he said.

Car sales will continue to show significant falls in France in the coming months, Neuvy said compared to very strong months in late 2009, when consumers flocked to take advantage of the thousand euro bonus before it was reduced.

In Spain, industry body ANFAC said car sales fell 23.8 percent in August to 44,578 units from 58,509 a year earlier.

Government subsidies for car buys ran out at the start of July, at the same time as a hike in value-added tax kicked in.


Auto sales in Japan saw their third-biggest ever monthly rise in August, led by Toyota Motor, Honda Motor and others, as consumers bought before government subsidies expire at end-September.

Japanese automakers are bracing for a hard landing after subsidies disappear. The government has allocated 583.7 billion yen ($6.9 billion) for the initiative, which took effect in April 2009, and that pool looks set to run dry in less than two weeks at the current pace of registration.

Sales of new cars, trucks and buses in Japan soared 46.7 percent to 290,789 vehicles, marking the third-biggest monthly rise on record, the Japan Automobile Dealers Association said.

Including 660cc minivehicles, sales rose 37.7 percent to 424,986 units.

(Additional reporting by Chang-Ran Kim in TOKYO, Miyoung Kim and Hyunjoo Jin in SEOUL, Sonya Dowsett in MADRID, Phil Blenkinsop in BRUSSELS, Antonella Ciancio in MILAN, Gianni Montani in TURIN and Bharghavi Nagaraju in BANGALORE; Writing by Muralikumar Anantharaman; Editing by Anshuman Daga, Mike Nesbit and Erica Billingham)