China's auto sales surged 29.7 percent in July from a year earlier to 2.42 million units, extending a recovery that began in June boosted by the waning COVID impact and kick-in of policy support.

China's auto companies exported a record 290,000 vehicles in July, a jump of 67 percent compared with the same time last year, data from the China Association of Automobile Manufacturers (CAAM) showed Thursday. New energy vehicles export increased 37.6 percent year on year to 54,000 units.

Sales of passenger vehicles soared 40 percent year on year to 2.17 million units in July, data showed.

The world's biggest auto market will see "stable increases" over the next few months, said CAAM's senior official Xu Haidong, after a chip shortage dented sales last year.

CAAM tracks broader auto sales including passenger vehicles, buses and trucks.

July sales were 3.3 percent lower than June as heat waves nationwide reduced customer visits to showrooms.

Earlier data also showed that the purchasing managers' index of the auto industry exceeded 52 in July, logged expansion for two consecutive months, indicating continued recovery of production and sales.

Sales of plug-in hybrids nearly tripled in the first seven months of the year, while sales of purely electric vehicles doubled.

China has ramped up efforts to boost auto demand with incentives such as a lower sales tax for small-engine vehicles and subsidies to spur trade-ins of gasoline vehicles for electric ones.

Made-in-China vehicles saw their popularity begin to soar in overseas markets in 2021. China's exports totaled 2.01 million vehicles in 2021, more than double the figure of the year prior. This put China in third place among exporters that year, next to Japan and Germany.

Read more: China's car exports surge substantially despite COVID-19 outbreaks

(With input from agencies)