(Yicai Global) Aug. 15 -- After a downturn in the first half of the year, China's auto industry showed signs of a recovery last month. Data released by China Passenger Car Association (CPCA) show that multi-purpose and passenger vehicle sales last month posted increase year-on-year.

A total of 1.67 million passenger vehicles (sedans, multi-purpose vehicles and sports utility vehicles) were sold in the country last month, up 6.1 percent year-on-year, CPCA data indicated. Passenger vehicle sales in the first seven months of this year totaled 12.2 million units, up 1.5 percent.

"With the uptick in market activity, July saw the fastest increase in passenger car sales this year," CPCA secretary-general Cui Dongshu told Yicai Global, "More than 12 million sales in the first seven months are a manifestation of consumers' enthusiasm in the auto market." The rebound in sales has been driven mainly by the upbeat economic climate and a stable real estate market, he added.

The recovery is reflected by a sharp rise in SUV sales, stabilizing sedan sales, and the impressive performance of Chinese auto brands, Cui pointed out.

With a product breakdown, SUV remained the fastest-growing market segment with a monthly gain of 18.6 percent in July. Sedan sales rose 0.2 percent year-on-year to 849,000, snapping a six-month losing streak. MPV sales, however, still have not crawled out of the downward trend.

From January through July, sedan sales amounted to 6.018 million units, accounting for 48 percent of total auto sales. Compared with the sales number for the same period last year, the cumulative sales decline continued to narrow to around 5.4 percent.

Strong growth of home-grown brands is the main driving force behind the auto market's turnaround. Chinese cars made up 43.5 percent (5.619 million) of the total sales in the seven months, marking an increase of 1.1 percentage points in their combined market share. In particular, SUV has acted as the most significant sales growth driver. During the period, Chinese automakers posted a 24.5 percent increase in SUV sales, substantially above the industry average at 16.99 percent.

"Under normal circumstances, sales of Chinese automakers rise rapidly starting in July or August, and autumn and winter are the peak season for them," Cui told Yicai Global, "This is mainly because that consumers in third- and fourth-tier cities have stronger spending power in the second half, and they generally prefer Chinese brands for higher price-performance ratios." This is also a manifestation of the fact that most home-grown auto brands are still targeting the lower end market.

Geely, Changan and Great Wall are the three best-selling Chinese auto brands in the last seven months. Despite the market downturn, Geely increased sales by 79.5 percent to 622,000 units. The former bestselling brand, Changan, saw a decline of 5.4 percent to 593,000 units. Great Wall took third place with 464,000 sales, an increase of 1.1 percent from last year.