Volkswagen increased group car sales in its key Chinese market in March by more than 30% year on year.

“The VW group delivered 70,400 cars to customers in China in March, which is an increase of 32.6% year-on-year,” a spokesman told the Reuters news agency, noting that first quarter sales in China rose 5.5% to 170,900 vehicles.

Overall market share improved in March but could not compensate for the drop below 30% in the first two months of the year, the report said.

“According to initial estimates, we are back above 30% in March,” the spokesman told the news agency. “For the first quarter, we are approaching the 30%.”

Reutres noted that China is VW’s second-largest individual market after Germany and has been key to the group’s growth story but VW’s capacity at its Chinese joint ventures lately has lagged behind the growth in demand, and rivals have moved into China in increasing numbers to chip away at VW’s still dominant market share.

Although Volkswagen delivered 697,207 vehicles in 2003, an increase of 36% year on year, overall market share dropped to 30.8% from 38.3% in 2002, the news agency said.