Chinese carmakers surge as sales top 12 million, Suzuki gets a boost from VW

In Asia Wednesday, major indexes closed lower. In Japan, the Nikkei Index fell 1.3% to 10,005 and in Hong Kong the Hang Seng Index was down 1.4% to close at 21,742. In China, the Shanghai Composite Index lost 1.7%, ending the day at 3,240.

Cars were the talk of the town today as the China Association of Automobile Manufacturers announced that this year's car sales have topped 12 million units so far, up more than 30 percent from last year, and that November sales for all vehicles were up 98%. Bloomberg reports that more than 20% of the cars sold have a price tag of around $5,000, putting pressure on carmakers to develop inexpensive, small cars to cater to the Asian market as opposed to the enormous, gas-guzzling SUVs still popular in the U.S.

Today shares in Tianjin FAW Xiali spiked 10% as the company's general manager announced that sales for 2009 were expected to total more than 210,000. The company has just unveiled the new model Xiali N5; a compact "European style" car, and has joined forces with GM. Shares in FAW Car Co, Tianjin's parent company also shot up 8.8%. Other Chinese carmakers also rose: Chongqing Changan Automobile rose 1.8%, SAIC Motor (SAI) added 7.7% and DongFeng (DNFGF) gained 1.4%.

In Japan, news that VW has agreed to purchase 19.9% of Suzuki Motor (SZKMF) was the latest European foray into the Asian car market. Europe's largest automaker hopes the $1.7 billion deal will increase sales in India where auto sales are also rising rapidly. A weak U.S. economy and faltering car sales have prompted carmakers to seek customers in emerging markets. Shares in Suzuki Motor surged 3.5% on today's news.

Also in Japan, Aeon (AEOH) rose 3% after announcing it will sell all of its shares in the unprofitable Talbots clothing chain. Strong words from the company's CEO made it clear that the U.S. market was not expected to yield profits soon. The U.S. clothing chain did not make a profit in eight out of the past 11 quarters, according to Bloomberg.

Japanese banking shares closed lower. Mitsubishi UFJ (MTU) plunged 5.2%, Mizuho Financial (MFG) lost 3% and brokerage company Nomura (NMR) slid 4.8%.

In Hong Kong, Banks led the slide with HSBC (HBC), the most heavily weighted stock on the exchange, dropping 2.6, Standard Chartered (SCBFF) plunging 4.2% and Hang Seng Bank (HSNGY) slipping 2%.

Hong Kong real estate shares fell today after China unveiled new plans to curb purchases by property speculators. Developers continued to assert that there is no property bubble in the territory and that prices will climb 10% in the upcoming year. But investors are growing skeptical; shares in Country Garden Holdings (CTRYF), owned by China's richest woman, plunged 4.5%, China Overseas Properties dived 3.1%, Hang Lung (HLPPY) fell 0.7% and Henderson Land (HLDVF) fell 0.6%. Overall, Asian investors had a bumpy ride today.

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