New car sales in China rose by 20% to 2.84m in the first two months of the year, boosting hopes that 2013 could be a stronger year than predicted. Sales in 2011 grew by 5.4% and in 2012 by 6.9%.

“The data showed that China’s passenger car market is extending a recovery,” Wu Jinghui, a director at consulting firm AlixPartners in Beijing, told Dow Jones. Improved consumer confidence, pent-up demand, and increased marketing and discounting by manufacturers are said to be behind the improvement.

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Some analysts are forecasting that passenger car sales will grow by 15% in March. Although this is the best start to a year since 2010, the China Association of Automobile Manufacturers (CAAM) is sticking with its full-year forecast that the market will grow 7% to a record 20.65m units.

CAAM figures show that total sales in January reached an all-time high of 2.03m units, up by 46% from the same month last year when the Chinese New Year holiday was celebrated in January.

This year the holiday was in February when vehicle sales fell to 1.35m from 1.56m in the same month last year. CAAM says that the two-month figure gives a better picture of demand.

Commercial vehicle sales shrank by 5% to 551,700 units as Beijing clamps down on property development and air pollution.

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German carmakers, with a combined market share of 19.34%, continue to prosper. Sales at Volkswagen were up 31% to more than 392,000; Audi sales were up 16% to 67,900 and BMW Group sales were up 2% to 23,400. Sales of Mercedes-Benz cars fell 39% to 26,800.

Japanese passenger car sales held a 12.5% market share for the two months, the CAAM data shows, down from 16.4% in December. But the figures suggest that the decline in Japanese sales prompted by the lingering territorial dispute between the two countries, is levelling off.