By The Associated Press

SHANGHAI - China's auto sales hit a monthly record of 1.11 million vehicles in March, exceeding U.S. sales for the third month in a row, as tax cuts and rebates for small car purchases lured buyers back into showrooms, according to industry figures.

The China Association of Automobile Manufacturers said sales rose five per cent in March from a year earlier, when sales totaled 1.06 million, the official Xinhua News Agency reported Thursday.

The data confirmed earlier, partial industry estimates suggesting sales remained robust in China, the world's second biggest auto market, despite deteriorating conditions in most major markets.

Americans bought 857,735 new vehicles in March, down 37 per cent from the 1.36 million sold in the same month a year earlier, according to Autodata Corp.

But a 25 per cent jump in U.S. sales from February has raised hopes that the worst may be over for an industry battered by global economic malaise and financial catastrophe.

China is bound to eventually overtake the U.S. as the world's largest auto market, and recent developments have accelerated that trend.

Based on the figure reported Thursday, first quarter sales in China totaled roughly 2.67 million units.

Despite a slowdown late last year, China's market remains relatively resilient, thanks in part to aggressive government moves to promote sales of smaller, fuel efficient vehicles, especially in the countryside.

General Motors Corp. said Wednesday that it sold 137,004 vehicles in China in March, up 24.6 per cent from a year earlier. Its minivehicle joint venture, SAIC-GM-Wuling, saw sales surge 38 per cent to 90,784 vehicles.