New vehicle sales in China rose by 8.8% to 2.44m units in March, from 2.24 units a year earlier, driven by strong demand for SUVs and MPVs –  according to data released by the China Association of Automobile Manufacturers.

Passenger vehicle sales rose by 9.8% to 2.06m units last month, from 1.87m units a year earlier, according to the association. Local industry observers pointed out that last October's sales tax cut on small cars with engines up to 1.6-litres and a broad range of new models entering the market helped lift the overall market in recent months.

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Sales of compact SUVs were particularly strong last month, with the overall segment expanding by close to 50% while MPV sales were up by 18%. Passenger car sales declined more than 3%, however.

Commercial vehicle sales edged up by less than 3% to 380,000 units last month from just over 370,000 units a year earlier, reflecting slower growth in the country's manufacturing output and sluggish exports.

Total vehicle sales in the first three months of the year increased by over 6% to 6.53m units, from 6.15m units in the same period of last year. Passenger vehicle sales rose by 6.7% to 5.67m units, while commercial vehicle sales were up by just 1% at 854,000 units.

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General Motors' local joint ventures reported a combined 0.6% drop in sales to 296,939 in March, while Ford's sales were up by 5% at 114,788 units.

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Toyota sales jumped by over 40% to 100,500 units last month, while Nissan sales were flat at 110,200 units and Honda's sales rose by 15% to 97,000 units.

Audi's sales rose by 5.4% to 50,986 units in March, while Mercedes-Benz reported a 27% rise to 38,133 units. BMW and Mini sales rebounded after a weak start to the year, with first-quarter sales rising by over 10% to 127,100 units.