On Tuesday, an industry group reported that in February, auto sales in China accelerated 55% compared to last year's sales.

According to the Government-affiliated China Association of Automobile Manufacturers, while sales of cars, commercial vehicles and SUVs increased to 942,900 units, sales of all vehicles including trucks and buses swelled 46% year-on-year to 1.21 million.

Last year, demand for small cars rose sharply owing to the Tax cuts and subsidies. On the whole, vehicle sales jumped 45% to 13.6 million, making China the world's largest auto market, while American car sales weakened.

In February, 623,100 passenger sedans were sold, a 46% rise from the year before, sales of vans and minivans leaped 72% to 25,200, and sales of SUVs increased twofold to 70,300.

However, analysts have predicted sales to slow down this year. An Yun, a researcher at Changxin Fund in Shanghai, said that the sharp increase seen in January was from orders booked late last year.

"I don't expect sales in 2010 to be as good as last year, though the question is how much slower they will be. To be fair, we need to watch what happens in the next couple of months", he said.