UPDATE 1-Brazil car sales down 5.2 pct Oct vs Sept-dealers

* Dealers see 9-10 pct sales growth in 2010 yr/yr

* Auto sales drop 5.2 pct in October from September

* Registrations for new cars rose 25.2 pct from Oct 2008 (Recasts, adds details, forecast, background)

SAO PAULO, Nov 4 - Automobile sales in Brazil dropped 5.2 percent in October from the previous month to 281,306 units, the country's car dealers' association Fenabrave said on Wednesday.

Registrations for new vehicles rose 25.2 percent in October from a year earlier, it said.

Fenabrave added that sales of new automobiles in Brazil are expected to rise between 9 percent and 10 percent in 2010.

Brazil's automobile market has been one of the strongest in the world in recent months as government tax incentives helped lower car prices and lured consumers to showrooms.

In late June, the government extended breaks on the so-called IPI tax on industrial goods for six months for trucks and for three months for passenger cars and motorcycles. The tax breaks will gradually expire through the end of 2009.

Brazil, Latin America's largest economy, is a major market for Italy's Fiat, Germany's Volkswagen AG, U.S.-based General Motors and Ford Motor Co.