China overtook the U.S. in vehicle sales for the first time last month, putting it on track to become the world's largest auto market this year, according to a forecast by leading auto-maker General Motors.

In a monthly conference on Tuesday, Mike DiGiovanni, General Motors executive director of global market and industry analysis, said China sold about 790,000 vehicles in January, meaning that China has overtaken the U.S. in monthly sales for the first time in history.

The official data for China's auto sales in January will not be released until February 6, but analysts expect that the figures will be pretty much in line with GM's forecast.

"Chinese auto sales were 859,400 units in January last year. Even with some slippage, the numbers for this year will keep pace," said Zhong Shi, an auto analyst.

However, it is too soon to conclude that China will be the largest auto market.

"Despite China's better showing, the situation is still grim," commented Zhong Shi.

In the U.S., meanwhile, auto sales in January contracted dramatically, down 37.1 percent to 656,881 vehicles in January, the lowest monthly level in 27 years, the US Automotive News reported.

Although China's car market has been cooling, with consumers wary of spending money since the second quarter of last year, it has seen signs of a recovery since the government announced measures last month to prop up their auto market, which overtook Japan in 2006 to become the world's second-largest.

The measures seem to have had an impact, as a number of car makers are celebrating a lucrative start to the year.

South Korean automaker Hyundai Motor Co. reported its China sales, at 42,790 vehicles, were 17 percent higher than a year earlier. China's domestic automaker Geely forecast that its sales in January will rise 25 percent from the previous year, buoyed by the measures taken to encourage buying small cars through tax breaks.

(China.org.cn by He Shan, February 5, 2009)