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.

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.

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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By GlobalData

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.