Chinese auto sales surged by 63.2 per cent on a year-on-year basis in March, it has been suggested.

The world's largest auto market witnessed new registrations of 1.26 million units during the month, according to figures released by the China Association of Automobile Manufacturers.

Consumers are flocking to showrooms across the country after the government decided to cut consumption tax on smaller vehicles and provide discounts for buyers trading in older cars.

Paul Newton, a London-based employee at Global Insight, explained that the Chinese auto market is "growing furiously", a sentiment underlined by a 45 per cent rise in sales last year to 13.6 million units.

"You have a government that is really supporting the auto market," he said in an interview with AFP.

Another of the emerging auto markets, India, saw passenger car sales leap by 20 per cent to 155,600 units in March and rise by 25 per cent to 1.53 million units in the fiscal year to March.

Pawan Goenka, President of the Society of Indian Automobile Manufacturers, which compiled the figures, told AFP that the impressive yearly improvement can partly be attributed to the country's recovery from the economic downturn.

A government stimulus package, combined with cheap financing and a raft of new models on the market, are also contributing to the strong auto sales in India at present.

Meanwhile, in the US, now the world's second-largest auto market after being surpassed by China, the seasonally adjusted annual sales rate for cars and light trucks reached 12 million in March, Bloomberg reports.

General Motors reported a 21 per cent rise in deliveries (188,546), allowing it to reclaim top spot from Ford, which enjoyed a sales leap of 40 per cent to 183,783 units.

Although the figures suggest that sales reached their highest level since the 'cash for clunkers' scheme last year, analysts are taking a cautious view on the impact of increasing consumer confidence.

"There's still a question of how strong is the underlying retail demand," Michelle Krebs, an Analyst at Edmunds.com, told the news provider.

"As the month wore on, the sales pace dropped and at the end of the month it was pretty weak. Sales were driven by deals, but these deals only go so far."

In Japan, sales of new cars, trucks and buses increased by 24 per cent to 674,494 vehicles on a year-on-year basis in March, boosted by an extra working day compared to the same month in 2009.

Furthermore, annual sales rose by ten per cent to 3.182 million vehicles for the business year to the end of March, representing the first double-digit rise in the country for two decades.

Moving to Europe, there were 397,383 new cars registered in the UK during the month, representing a jump of 26.6 per cent in comparison to the same period in 2009.

The Society of Motor Manufacturers and Traders revealed that registrations of UK-built cars leapt by 52.1 per cent, as the government's scrappage scheme continued to have a positive effect.

However, the new car market in Germany contracted for the fourth consecutive month as the country continued to feel the strain of its own buyer incentives coming to an end in September 2009.

According to figures from the VDIK association of foreign carmakers, a 26.5 per cent year-on-year decline was witnessed in March, bringing the first-quarter fall to 23 per cent.

There was better news in Spain, where car sales surged by 63.1 per cent to 124,756 units in March in comparison to the equivalent period 12 months earlier.

Despite the Spanish economy still struggling, the latest rise follows increases of 47 per cent and 18.1 per cent in February and January respectively, automakers' association ANFAC confirmed.

The figures are being boosted by government subsidies of up to €2,000 for new car purchases and incentives for buyers who replace old cars with new, energy-efficient models.

In Russia, new car sales slipped by seven per cent in March to almost 127,000 units, although this rate of decline was smaller than in the previous two months.

Discounts for buyers of domestic models who trade in their 'bangers' helped companies such as AvtoVAZ, which posted a month-on-month sales increase of 60 per cent.

Elsewhere, the National Association of Automobile Manufacturers of South Africa revealed that new vehicle sales grew for the third straight month in March.

As the country's auto market continues to recover from a tough 2009, sales soared by 20.1 per cent on a year-on-year basis and by 10.9 per cent in comparison with the total for February.

"The automotive market in South Africa was at an early stage of what would hopefully represent a sustainable recovery," said the group, which has revised its full-year growth estimate from seven per cent to 12 per cent.

With so many countries posting increases in auto sales during March, both platinum and palladium prices enjoyed strong rises in the final days of the month.

The two precious metals, which are used in catalytic converters, managed to reach levels not seen for about 18 months, the Associated Press reports.

"Generally, motor vehicle sales are a good indicator of consumer spending and consumer sentiment," Fred Jheon, Managing Director and Head of Product Development at ETF Securities, told the news provider.

"People are feeling a little bit better about the economy and so with that comes a bit of discretionary spending."

Sources:

India, China car sales race higher (09/04/10)

U.S.A.: GM, Toyota, Ford Gain on Incentives in 'Rough' Market (01/04/10)

Japan car sales jump on stimulus, Hyundai soars (07/04/10)

Indian car sales show strong annual growth (01/04/10)

Spanish car sales rise 63 pct y/yin March-ANFAC (05/04/10)

Palladium, platinum jump on improving auto sales (01/04/10)

German car sales still undercut by incentives' end (06/04/10)

AvtoVAZ gets spring joy from car scrappage scheme (01/04/10)

South Africa: March vehicle sales jump 20%, 2010 growth expectation revised (06/04/10)

U.K.: New car market up 26.6% in March (08/04/10)

India Car Sales Gain at Fastest Pace in 6 Years on New Compacts (09/04/10)

Russia New Car Sales Drop 7% In March On Year; Decline Slows (08/04/10)

Indian car sales show strong annual growth (01/04/10)

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