(Adds details, analyst comment)
By Fang Yan
SHANGHAI, Jan 12 (Reuters) - Car sales growth in China, the world's second-largest auto market, slowed to a single-digit rate last year for the first time in at least 10 years as consumer confidence waned with a slowing economy, spurring government steps to bolster demand.
Analysts said the outlook for this year remained bleak, although tax incentives and other measures may help to keep the market from shrinking, while some automakers such as the Japanese have been able to cushion the blow by introducing new models.
China's passenger car sales in 2008 rose 7.27 percent to 6.76 million vehicles, while sales in December fell 7.99 percent to 584,600 units, marking a fourth monthly decline for the year, data from the China Association of Automobile Manufacturers showed on Monday.
"The auto industry has entered a brutal winter," said Chen Qiaoning, an analyst with ABN AMRO TEDA Fund Management.
"There are no signs of recovery so far, but if the government's auto stimulus package comes out soon, we will at least see positive growth for the full year."
Beijing is expected to unveil an unprecedented policy package as early as this week aiming to ensure at least 10 percent sales growth for the industry, although some analysts said that could be difficult to achieve.
The policy kit, subject to approval by the State Council, or cabinet, will include a reduction or waiver of the 10 percent auto purchase tax, the official Shanghai Securities News has reported.
China, the world's fastest growing major auto market, had posted three years in a row of car sales growth above 20 percent until slowing economic growth began to erode demand last year.
India also posted an auto sales drop of 7 percent in December, while the full-year figure edged up 1.96 percent to 1.20 million units, official data showed.
NEW MODELS
Last year's slowdown in China was particularly marked at General Motors Corp, one of the country's two top car sellers, hurt in part by an aging product line-up.
The automaker, which is counting on a bridge loan from the U.S. government to stave off bankruptcy, sold 6.1 percent more cars in China in 2008, compared with 12.5 percent growth at Volkswagen AG, its leading rival in the country, which rolled out a new Skoda Fabia, Lavida and other models last year.
"The problem with GM is that most of its models sold in China are approaching the end of their life cycles," said Yale Zhang, director at CSM Asia.
"It will do better this year with new car models including a brand new Buick Regal it rolled out late last year."
GM unveiled plans to launch at least five new models under the Buick and Chevrolet bands over the next three years after reporting its first decline in annual sales in its 12-year-old car venture with SAIC Motor Corp.
Ford Motor Co's car venture in China reported a 5.9 percent decline in 2008 sales.
The U.S. automaker has struggled to produce a hit in the Chinese market following the roll-out of its highly successful Focus sedan more than two years ago, analysts said.
Honda Motor managed 11.7 percent sales growth in China last year, helped by its new City and Accord sedans, which accounted for nearly 40 percent of its total sales.
Toyota Motor Corp sold 17 percent more vehicles in China last year and a spokesman said the Japanese auto maker was on target to open its second assembly line in south China and bring the Lexus RX 400h hybrid SUV to the country this year. (Reporting by Fang Yan; Editing by Edmund Klamann)