Auto sales in the January-February period totaled 4.27 million units, up 7.5 percent year on year, according to the data.

In February alone, sales of passenger vehicles increased 27.8 percent year on year to 1.49 million units.

China's carmakers manufactured 1.81 million vehicles in February, an increase of 20.6 percent year on year, the association said.

Sales and production in the auto sector remained generally stable in the first two months of the year, CAAM said. It noted that industry has continued its year-on-year growth, rising 10 percent from the same period in 2019.

Auto exports surged 60.8 percent from a year earlier to 180,000 units last month, bringing total exports in the first two months to 412,000 units.

In February, China's new energy vehicles sustained a rapid pace of year-on-year growth, CAAM said.

The association expects the auto market to see steady growth in the first quarter, as the implementation of bigger tax and fee cut policies and other measures supporting enterprises will boost the economy and the auto sector.

Despite a stable economic performance in the January-February period, CAAM said it remains cautiously optimistic. It warned that a complicated external environment, coupled with factors including a chip shortage and the rising costs of raw materials, could weigh on factory production and business operations.

Companies in the sector should keep a close eye on market changes and plan ahead, the association said.