(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.