China made 1.1568 million vehicles, and sold 1.1531 million domestically made vehicles last month. The sales represent a record high, up 25 percent from a year earlier, the China Association of Automobile Manufacturers (CAAM) said Friday.

The production level is 5.61 percent higher than March 2009, and 17.89 percent higher than April 2008. The sales represent an increase of 3.91 percent from March 2009, and 24.97 percent from April 2008. Both production and sales set record high.

In the first four months, motor vehicle sales hit 3.832 million units, up 9.4 percent year on year, while a total of 3.725 million units were produced year on year, up 6.4 percent, according to CAAM.

The CAAM said small passenger car sales were bolstered by the government's stimulus policies that cut purchase taxes for cars with small engine capacities and provide subsidies to rural purchasers.

In addition, middle sized and luxury passenger cars also showed signs of recovery, automobile export increased 15.9% over March to 260,000 units, and the decline of profit has significantly slowed down.

Still, CAAM said the industry faces a lot of challenges. The result would have not been achieved without the government stimulus policy, the total revenue of 268.6 billion yuan is 14.15% lower than the first four months of last year and total profit of 10.8 billion yuan is 48.36% lower than the same period of last year.