Chinese auto sales surged 25% in February from a year earlier, as a tax cut for small cars and other measures helped revive the market, an industry group said today.

February's sales totaled 827,600 units, up 12% from the 735,000 sold in January, the China Association of Automobile Manufacturers said in a report posted on its Web site.

That's the second month in a row that Chinese vehicle sales beat U.S. sales, which totaled 688,909 cars and trucks in February. In January, Chinese monthly auto sales overtook those in the United States for the first time — largely because of a plunge in American car sales.

Shanghai-based SAIC Motor Corp., a partner of both General Motors Corp. and Volkswagen AG, led the market with 169,500 vehicles sold in February, followed by FAW Group, with 114,100 units sold, the industry group said.

Passenger cars accounted for 607,300 of the vehicles sold.

Production in February totaled 807,900 units, up about 23% from the year before, it said.

China slashed the sales tax on small-engine passenger cars earlier this year, seeking to boost sales of fuel-efficient vehicles, especially in the countryside. It is also rolling out a program to subsidize car purchases by farmers.

"The forecast is that the situation in March will be even better than February," the government-run newspaper Shanghai Securities News quoted Xiong Chuanlin, a senior association official, as saying.

However, despite the apparent rebound in China's own auto market, a slump in demand is crimping sales overseas: exports in January fell 33.5% from a year earlier, to $2.66 billion, the group said.

The impact was most severe for domestic-brand cars, with January exports falling 64% from a year earlier to 16,300 units, it said.

Imports of vehicles also took a hit amid the deepening economic downturn, falling 20.3% from a year earlier in January to $1.73 billion, it said.