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A BAIC Motor new-energy car is on display at an auto show in Guangzhou last August. [Photo/China Daily]

July sales of passenger cars saw a surge of 26.3 percent year-on-year, the highest monthly growth rate in at least 30 months in the Chinese market.

Some 1.6 million passenger cars were sold last month, bringing the total sales in the first seven months to 12.64 million units, up 11.1 percent from the same period last year, according to statistics from the China Association of Automobile Manufacturers.

Soaring passenger car sales have pushed total vehicle sales in the first seven months to 14.68 million units, a growth rate of 9.84 percent year-on-year.

The CAAM estimated the growth rate in 2016 to reach about 6 percent at the start of the year.

Chen Shihua, a vice-secretary general at the CAAM, said the favorable policy that halves the purchase tax on cars with engines no larger than 1.6 liters, which is in most cases 10 percent of a car's sticker price.

In July, 1.14 million cars with engines no larger than 1.6 liters were sold, a 38.6 percent surge year-on-year.

"Each month such cars have accounted for 70 percent of passenger car sales this year. We can say that it has played a role in boosting the performance," said Chen.

In July, 634,000 cars from Chinese brands were sold, an increase of 27.6 percent from the same period last year, with SUVs seeing the most rapid growth rate -- a 57 percent rise year-on-year.

New-energy vehicles are keeping their momentum. In July, 38,000 units were sold, a 93 percent surge year-on-year.

Through the first seven months of this year, 207,000 new energy vehicles were sold, up 122.8 percent year-on-year. The CAAM expects total sales of such vehicles to reach 700,000 units this year.