Beijing Hyundai Motor, the Korean automaker's Chinese joint venture, sold 41,880 vehicles last month, up 70% from the same period last year, and the first time the company has reached the 40,000 mark in monthly sales since its launch in 2002.

Sales in the first quarter also rose almost 50% to a new high of 109,000, the Korea Times reported.

The company said it was likely to comfortably achieve its yearly sales target of 360,000 vehicles, aided by government incentives.

Currently, buyers of vehicles under 1.6-litre engine capacity have their purchase tax cut by 5% under Beijing's steps to revitalise cooling domestic demand.

"[Hyundai] is better positioned to sell small cars in China as the Chinese government offered tax cuts and subsidies for buyers of smaller vehicles,'' a Beijing Hyundai official said.

Though still trailing bigger ventures by global giants such as General Motors and Volkswagen, Hyundai has become China's fourth largest foreign player this year, up three notches from 2008.