Shanghai Volkswagen - a joint venture between Shanghai Automotive Industry Corp (SAIC) and Germany's Volkswagen Group - said it had revised its sales forecast from 240,000 to 270,000 units this year.

And sources close to Shanghai GM, run by SAIC and US auto giant General Motors, said the company expects to sell 100,000 cars this year, up from its previous target of 80,000 units.

"This confidence among manufacturers has been fired by better-than-expected sales of domestically made cars," said Jia Xinguang, an analyst at the China National Automotive Industry Consulting and Development Corp.

According to statistics from China Association of Automobile Manufacturers (CAAM), sales of domestically made cars increased by 41.8 percent year-on-year to 680,300 units between January and August.

In August alone, car sales reached a monthly record high of 106,900 units - up 51.8 percent from a year earlier.

Zhu Yiping, an official at CAAM, predicted car sales would exceed 800,000 units during the first three quarters of this year based on current growth momentum.

"The upbeat market conditions are mainly the result of soaring demand by Chinese consumers, especially private buyers," Jia said.

"This is spurred by new product launches by auto manufacturers and price cuts."

Around half the total of domestically made cars were sold to private consumers, he said.

And dozens of new car models are to be launched during the second half of this year.

Shanghai Volkswagen launched a 1.6-litre Polo last week while Nanjing Fiat, the manufacturing base of Italian giant Fiat in East China's Jiangsu Province, began selling its 1.3- and 1.5-litre Siena on Sunday.

Shanghai GM will also start production of a new model at the end of this year. Sales of the company reached 69,700 units during the first eight months of this year, an increase of 123.6 percent on the same period last year.

"The market is growing beyond our expectations. We estimated a 10-15 percent increase in car sales this year," said Qin Huanming, general manager of FAW Volkswagen, Volkswagen Group's joint venture with First Automotive Works Corp based in Changchun, capital of Northeast China's Jilin Province.

Earlier this month, FAW Volkswagen increased its sales forecast this year to 189,000 units from 165,000.

Dongfeng Citroen, a joint venture between Dongfeng Motor Corp and French carmaker PSA Peugeot Citroen, has also raised its target this year to 80,000 units from 75,000.

Despite this, car manufacturers are not overly optimistic.

"There are uncertainties in the market. A slowdown in car sales is expected at the end of this year," said Joan Ren, the spokesperson for Shanghai GM.

According to CAAM, total sales of domestically made vehicles during the first eight months of this year increased by 32.2 percent year-on-year to 2.08 million units.

Sales in August stood at 271,500 units, up 39 percent on a year earlier.

(China Daily September 17, 2002)