Shanghai, March 16 (Gasgoo.com) After overtaking the United States in January auto sales, China extended its lead as the world's largest auto market in the second straight month this year, xinhuanet.com said today.

In February, China sold a total of 827,600 vehicles, up 24.72% year on year (y/y) and up 12.43% month on month (m/m), according to the China Association of Automobile Manufacturers (CAAM). Vehicle output increased 23.08% y/y to 807,900 units. Passenger car sales in February rose 24.23% from a year earlier to 607,300 units, the CAAM said.

Last month, the auto sales in the United States stood at 689,000 units, down 41.3% from a year earlier, the biggest fall in six months, according to industry tracker Autodata. That means China exceeded the U.S. again to be the world's largest auto market in February.

The January auto sales in China hit 735,000 units, which surpassed the 656,976 vehicles sold in the U.S. the same month. While car sales also slowed in China, but less dramatically, amid the economic downturn, U.S. sales tumbled 37% in January to a 26-year low.

Passenger cars accounted for more than 73% of the total 827,600 vehicles sold in China in February. And passenger cars with engines under 1.6 liters accounted for 70% of the passenger vehicle market, so the bounce of small-engine cars played a critical role in the revival.

Shanghai, March 16 (Gasgoo.com) Guangzhou Automobile Industry Group Co (GAC) has set up an overall framework with Fiat SpA on forming a 50:50 joint venture to produce and distribute Fiat small cars, Beijing Times reported Monday, citing an informed insider.

Major executives have been selected for the JV, according to the source. Jiang Ping, former deputy general manager of Guangzhou Honda Co and active deputy general manager of GAC, would take charge of the planned venture. Yan Jianming, vice marketing director at Guangzhou Honda, would possibly become new marketing director of the new company.

No executives from Fiat has been decided, said the report. Fiat China said they have nothing to announce at present. 

GAC general manager Zeng Qinghong told reporters last week that a Guangzhou-Fiat joint venture is quite possible.

The Linea and Grande Punto that are now sold in China as imported Fiat models, as well as the Palio that was previously made in Nanjing Fiat, are reported to be produced in the planned venture at the early stage.

Fiat had an initial agreement with Chery Automobile Co to set up a joint venture in the world's second-largest car market, but no further progress has been made.

U.S. research firm Freedonia Group is forecasting a 4.7 percent annual rise in global demand for plastics processing machinery, taking the market value to US$24.9 billion (170.3 billion yuan) in 2012. In 2007, demand stood at US$19.8 billion (150.8 billion yuan), it estimated.

China is expected to increase plastics processing equipment demand by more than US$1.6 billion (10.9 billion yuan) from 2007 to 2012. By then, China will account for nearly one-quarter of the global market.

The Asia-Pacific market, including China, is expected to grow at a 5.5 percent annual rate from US$8.99 billion (68.5 billion yuan) in 2007 to $11.8 billion (80.7 billion yuan) in 2012. Much slower market growth is predicted for the North American and European markets.

Plastics processing machinery demand in North America was US$3 billion (22.9 billion yuan) in 2007 and will rise by 2.8 percent per year to US$3.45 billion (23.5 billion yuan) in 2012, according to Freedonia.

In Europe, demand will increase at only 2.2 percent per year from US$4.16 billion (31.7 billion yuan) in 2007 to US$4.64 billion (31.7 billion yuan) in 2012.

Shanghai, February 11 (Gasgoo.com) Data from local customs authorities show that Fujian province of southeast China exported and imported $840 million worth of auto parts in 2008, up 27.1% from a year earlier.

The export generated $710 million yuan, up 35.8%, slower than the 64.5% growth of 2007; the import value hit $130 million yuan, down 4.2%, compared with the 89.5% growth of the previous year.

In the January to August period, Fujian's auto-parts export value grew rapidly, with the peak occurring in March when the export earned $100 million, up 2.9% year on year. But in September the export growth slowed down to 7.5% amid the global financial crisis, and in October-December the export saw negative growth.

The province's import of auto parts grew in the February-August period, with April as the peak when the import value hit $20 million, up 81.3% year on year. In September, the import began to fall.

Last year, the general trade contributed $640 million, or 90.4%, to the total auto-parts export value of Fujian province, up 37.9% y/y, and the import value reached $130 million by general trade, falling by 8.2% from 2007 and accounting for 92% of the total imports.

Foreign-invested enterprises exported $260 million worth of the province's auto parts in 2008, rising by 45.7% y/y. Exports by private companies generated $260 million, up 37.2% y/y. Exports by state-run enterprises hit $170 million yuan, up 23.2%.

The imports of foreign-invested companies reached $120 million yuan, falling by 3.7% from 2007 and accounting for 86.8% of the total imports in 2008. Imports of private enterprises hit $20 million, down 1%.

The major destinations of the exports were the ASEAN ($200 mln, +24.9%), U.S. ($80 mln, +11.8%) and EU ($70 mln, +9.9%). The three markets account for 49.5% of the total value of Fujian's auto parts exports in 2008.

Meanwhile, the three major origins of the imports were Japan ($70 mln, +5.4%), U.S. ($20 mln, +6.9%) and Taiwan ($20 mln, -49.1%). The imports from Japan accounted for 52.7% of the total import value.

TOKYO, Feb 9 - Core Japanese machinery orders fell 1.7 percent in December, far less than expected, although economists say corporate capital spending remains very weak as the global economic crisis shows no sign of letting up.

The nation's banks, less damaged than their western peers from the market turmoil, increased their lending by the most on record in January, as companies turn to their bankers in the face of a seized up credit market.

Japan, along with the United States and the euro zone, are in recession as the global financial crisis cuts exports, triggering cuts in production and jobs. Japan's current account surplus slid 92 percent in December from a year earlier.

While the fall in machinery orders was only one-fifth that expected by the market, analysts took little joy from it, saying there were one-off factors in the steel sector that would not be sustained.

The cash value of orders was at its lowest since 1987.

"Although the headline figure was better than expected, we cannot be optimistic given the sharp deterioration of the previous month and two straight quarters two-digit falls," said Yoshiki Shinke, senior economist at Dai-ichi Life Research Institute.

"Japan's capital expenditure will be significantly weaker in 2009 largely due to a deterioration of external demand.

Japan's Nikkei average rose 1.3 percent on Monday, buoyed by exporters such as Honda Motor Co on a weaker yen and amid hopes for economic stimulus measures by the U.S. government to bolster the economy.

Shares of machinery makers such as Komatsu Ltd rose, helped in part by the less-than-expected fall in machinery orders.

The fall in core private-sector machinery orders, a leading indicator for corporate capital spending, was much smaller than the median forecast from economists for an 8.8 percent fall.

In October-December, core orders, which exclude those for ships and machinery at electric power firms, fell 16.7 percent, the sharpest quarterly fall on record.

Many companies including Toyota Motors, which had been expanding production capacity to take advantage of robust growth in emerging markets until several months ago, have been forced to cut production as they face unprecedented losses.

That has led to a sharp drop in industrial output. Data due next week is expected to show that Japan's economy likely shrank at its fastest pace since 1974 in the final three months of 2008, a Reuters poll shows.

With much of the developed world seen contracting at least until the next quarter, many economists expect the Japanese economy to only start a slow recovery later this year.

"The economy may start growing in the latter half of this year but we can't expect it to achieve its potential growth rate, probably until the year after next," said Hiroshi Shiraishi, an economist at BNP Paribas.

"If the economy is still contracting later this year, it may be falling into a deflationary spiral."

The mounting gloom over the economy has been putting strains on financial markets, widening credit spreads sharply and making it difficult for companies with low credit ratings to issue debts in markets.

That led bank lending to rise 3.7 percent in January from a year earlier, Bank of Japan data showed.

Following a slight downward revision in December data, January's increase from a year earlier was the largest since the Bank of Japan started publishing the data in 2000.

The outstanding balance of commercial paper held by banks fell 10.1 percent in January from a year earlier after a 15.0 percent drop in December, reflecting the problems in credit markets.

The pace of fall slowed from the past few months after the BOJ said it would buy 3 trillion yen ($32.6 billion) of commercial paper by the end of March.

Wary of mounting woes for Japan's economy, the BOJ has nudged interest rates near zero and decided to buy commercial paper, corporate bonds and shares held by banks to ease credit strains.

Senior BOJ officials, including board member Atsushi Mizuno, has signalled that the central bank was ready to examine further steps to support the economy and ensure financial stability.