Sales of domestic cars in China set a new record of 1.11 million units in March, up 5 percent from a year earlier, China Association of Automobile Manufacturers (CAAM) said Thursday.

This was an increase of 34 percent from February. In February, sales rose 24.7 percent year-on-year to 827,600 units.

Carmakers produced 1.1 million motor vehicles last month, up 5.55 percent year-on-year, according to CAAM.

The first-quarter sales and production totaled 2.68 million and 2.57 million, up 3.88 percent and 1.91 percent, respectively.

The association said sales were buoyed by government stimulus policies. On January 20, China halved the purchase tax on passenger cars to 5 percent for models with engine displacements of less than 1.6 liters.