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China's auto sales in June rose at their fastest monthly rate so far in 2009, putting the country on track to overtake the U.S. as the world's biggest auto market this year.

China's auto sales last month jumped 36.5% from a year earlier to 1.14 million units, and sales in the first half rose 17.7% from a year earlier to 6.10 million units, the China Association of Automobile Manufacturers said in statement.

Separately, the official Xinhua News Agency cited the semi-official industry association as saying China is likely to sell more than 11 million autos this year. That would represent a 17.3% increase from the 9.38 million units sold in 2008 and be above CAAM's earlier prediction of 10.2 million units.

In contrast, U.S. car and light truck sales in June fell 28% from a year earlier to 860,000 units, according to market-research firm Autodata Corp. The annualized sales for the U.S. are 9.69 million, the firm said.

While car sales have been ravaged in the U.S. by the global financial crisis and credit crunch, they have benefited in China from favorable tax policies on small cars and subsidies for vehicle purchases in rural areas.

General Motors Corp.'s (GM) sales in China rose 38% in the first six months this year from a year earlier to 814,442 units, a record for the company. The company expects sales volume growth of more than 20% for the full year, GM China President Kevin Wale told Dow Jones Newswires on Wednesday.

Sales have been especially strong at GM's mini commercial-vehicle joint venture, SAIC-GM-Wuling Automobile Co., which manufactures cars eligible for a purchase tax cut implemented earlier this year. The venture's first-half sales rose 50% from a year earlier to 524,598 units.

However, sales of large-engine and luxury cars have also risen amid improvements in China's economy, including a turnaround in the real-estate sector, sharp gains in the stock markets and an explosion in credit growth.

Declines in urban property prices in China slowed for the second consecutive month in May as sales volume expanded, while the Shanghai Composite Index is up 70% since the end of last year.

China's new yuan loans, meanwhile, soared to CNY1.53 trillion in June, more than double the CNY664.5 billion in May.

Sales of BMW AG's (BMW.XE) core BMW brand in China during June rose 46% from a year earlier to 8,033 cars. Audi AG's (NSU.XE) car sales in China and Hong Kong rose 28% in June to 13,265 units.

In China's overall passenger vehicle market, sales rose 48.4% in June from a year earlier to a record 872,900 units, CAAM said.

In the six months ended June 30, auto sales rose 17.7% from a year earlier to 6.10 million units, the association said.

Passenger vehicle sales rose 25.6% to 4.53 million units in the first half, but commercial vehicle sales fell 0.5% to 1.57 million units.

-By Patricia Jiayi Ho and J.R. Wu, Dow Jones Newswires; (8610) 6588 5848; patricia.ho@dowjones.com