Sales of motor vehicles including passenger and commercial vehicles reached 1,735,200 units in March, a new monthly record high, according to statistics from the China Association of Automobile Manufacturers (CAAM) released. 

The figure brought China's auto sales in the first quarter to 4,610,600 units, up 71.8 percent from the same period last year. 

In the first three months passenger vehicle sales surged 76.3 percent year-on-year to 3,523,900. Commercial vehicle sales increased 58.5 percent to 1,086,700 units, said the industry association in a statement.

Domestic Chinese brands are gaining in market share. Of the total passenger vehicle sales in the first quarter, they contributed 49 percent, up 5 percentage points from 2009 as a whole. Meanwhile, Japanese, German, American, Korean and French brands accounted for a respective 20 percent, 12 percent, 10 percent, 7 percent and 3 percent of the total sales.

Sales expected to slow

In spite of explosive growth in the first quarter, auto sales are poised to slow.

One reason the market has been growing by above 70 percent on an annual basis is that we are comparing it with a very low base, noted Kevin Wale, GM China President and Managing Director. "The first quarter of last year was a very bad quarter," he said at a media briefing Monday in Shanghai.

Affected by the global economic downturn, auto sales only grew 3.9 percent year-on-year in the first quarter of 2009 to 2,678,800 units, according to CAAM statistics. That was very weak growth in a market which had been growing by an average of 16.7 percent each year before 2009.

At the media briefing, Kevin Wale said he expects auto sales in China this year to post an annual growth of between 15 percent and 20 percent.

Auto sales in China started taking off last April after the Chinese government halved purchase taxes on vehicles with engine sizes of 1.6 liters and below to stimulate consumer demand.

As a result, auto sales in China reached 13,644,800 units in 2009, up 46 percent from 2008.  

Given the extreme exuberance in the market in the second half of 2009, John Zeng, who is a market analyst with IHS Global Insight in Shanghai, said he would not be surprised if the market posts negative growth in an individual month later this year.

But overall, Zeng predicts that China's auto market will likely grow by around 18 percent this year.