China's auto sales jumped 55.7 percent year on year in August, boosted by Beijing's new subsidies scheme for energy-saving vehicles, state media said Thursday.

Sales in the world's largest auto market rose to 1.22 million units in August, the Shanghai Securities News reported, citing figures from the China Automotive Technology and Research Centre.

The figures were 15.1 percent higher than July and the growth was likely to continue into September, the report said.

US auto giant General Motors said Thursday its sales in China grew 19.2 percent in August from a year earlier to 181,625 units.

"August auto sales exceeded market expectations, indicating obvious improvement in the fundamentals of the industry," Zheng Dong, an auto analyst at China International Capital Corp, said in a research note.

He noted that purchases were partially boosted by discounts offered by car dealers to spur turnover.

He said more buyers could drop their wait-and-see stance and cause sales to "explode" in the typically brisk months of September and October.

China announced a trial programme in June to subsidise environmentally-friendly vehicles in five cities as part of efforts to reduce emissions, save energy and spur the development of green technology.

Under the trial project, the government offers subsidies of up to 60,000 yuan (8,850 dollars) for hybrid and electric cars and 3,000 yuan for fuel-saving models.

China's auto sales for 2009 hit 13.64 million units as the nation took over the title of the world's top auto market from the United States.

Sales have slowed in recent months, partially due to seasonal factors, but 2010 is still forecast to see more than 15 million units shifted - an increase of about 20 percent year on year.

The strong August figures boosted shares of Chinese auto makers Thursday.

SAIC Motor, the nation's biggest car maker by sales volume, closed 8.9 percent higher on the Shanghai stock market while Hong Kong-listed Dong Feng was up 2.4 percent in the afternoon.


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