Car sales in China rose 0.29 percent in November from a year earlier, holding onto a mild rebound from a trough hit in May, as automakers used year-end promotions to lure customers back to showrooms.

The momentum, deflated in the data by the year-ago base effect, is expected to pick up in December as automakers and dealers, struggling to meet their annual sales target, aggressively offer discounts and give-aways.

"October was almost flat, but sales have been picking up gradually since the beginning of the month as rebates and other gimmicks kicked in," said Sheng Ye, associate research director at industry consultancy Ipsos' Greater China region.

"Japanese automakers such as Toyota and Honda are more aggressive than the European or American players, as they try to recoup some of the lost sales in China because of the earthquake."

Toyota Motor officially debuts its 7th generation Camry at a news conference in Shanghai, Nov 8, 2011. [Photo/Xinhua]

Select models of Toyota Motor's Camry are priced at merely 162,000 yuan now, making a nearly 16 percent knockdown. Nissan Motor and Honda Motor are also offering generous discounts to for older Teana and Accord models, according to Ipsos.

Local brands, hit badly by the withdrawal of tax incentives for small cars, are also resorting to rebates to push sales.

Fang Qinliang, sales manager at Guangzhou Mingzhi Auto Trading which handles Geely's Emgrand brand cars, would provide a cash rebate of 2,000-3,000 yuan for each car sold.

China's once-booming vehicle market cooled to a 5.3 percent gain in the first 11 months, after jumping 32 percent and 46 percent, respectively, in 2010 and 2009.

The slowdown has been attributed to a raft of factors, from the end of tax incentives for small cars to local authorities' initiatives aimed at easing ever-worsening traffic congestion in major cities, such as Beijing.

Regulator's recent moves to raise the bar for cars qualifying for 3,000-yuan fuel-efficiency handouts has been cited as a reason for further dampening car sales, which edged up 1.4 percent in October from a year ago, the slowest annual gain since May.

In November, a total of 1.34 million sedans, sport utility vehicles and multipurpose vehicles were sold, the China Association of Automobile Manufacturers (CAAM) said.

The November figure was 10.1 percent higher than in October, when 1.22 million units were sold, according to CAAM.

In contrast to the hefty month-on-month gain, November's small annual percentage rise was due in part to the higher year-ago base effect, said Dong Yang, secretary general of CAAM, who noted that sales in November and December 2010 were particularly strong as people rushed to showrooms before government subsidies were phased out.

By comparison, auto sales in the United States, the world's second-largest auto market, rose 14 percent in November, paced by gains at Chrysler Group LLC and Volkswagen AG, as consumers returned to showrooms even without the lure of a big year-end sale.

In Japan, car sales in November rose by more than 20 percent for the second consecutive month, thanks to a low comparison base from last year while South Korean carmakers saw strong growth in overseas sales more than make up for falling sales at home.

Sanguine on growth potential

Industry executives remain sanguine on long-term growth potential while coming to terms with the end of breakneck expansion that helped China eclipse the United States as the world's biggest auto market in 2009.

Karl-Thomas Neumann, president and CEO for Volkswagen's China operations, expected the country's car market to grow 8-10 percent in the coming years thanks to pent-up demand in lower-tier cities.

General Motors China chief Kevin Wale, was equally upbeat, betting for a 7-10 percent gain.

Both companies are adding capacity in the country where each aims to sell 3 million vehicles annually in 2015.

Among the bulls are also Wang Fengying, president of China's top SUV and pickup truck maker Great Wall Motor, which is expected to double its earnings this year.

Wang expected China's overall vehicles sales to continue to grow at a normal pace till 2015 and a 10 percent annual gain seems normal for her.