After last year’s breakneck growth in sales, consumers are holding back as China slows down and massive government stimulus measures including car-buying incentives are scaled back, they say.

But foreign automakers are still confident in the Chinese market, with some boosting production capacity as they bank on increased long term demand from the nation’s expanding middle class.

Auto sales totalled 9.02 million units in the first half, up 48 percent from a year ago, according to the China Association of Automobile Manufacturers.

Sales have slowed since the start of the year, from a 124 percent on-year increase in January to just a 17.2 percent jump in July, but 2010 sales are still forecast to top 15 million units — about a 20 percent on-year increase.

Chinese automaker BYD Co. — backed by US billionaire Warren Buffett — nevertheless cut its 2010 sales target by 25 percent to 600,000 after achieving only 36 percent of its original target of 800,000 units in the first half.

US auto giant Ford — which just sold struggling Swedish brand Volvo Cars to China’s Geely Group — in July posted a 6.3 percent drop in passenger car sales in China, but remains optimistic.

General Motors, which has a greater presence in China than Ford, said its sales had grown 22.2 percent year-on-year in July, after selling more than 1.2 million units in the first half of 2010, up 48.5 percent from a year earlier.

Honda Motor, which aims to boost annual production in China by nearly 30 percent to 830,000 vehicles by 2012, said Friday its July auto sales in China rose 12 percent from a year earlier to 56,688 units.

Source : Konaxis