SHANGHAI (Bloomberg) -- China's passenger-vehicle sales rose more than analysts estimated in May as purchases of Toyota Motor Corp. and Honda Motor Co. cars recovered from disruptions caused by last year's natural disasters.
Deliveries, including multipurpose and SUVs, rose by 23 percent to 1.28 million units last month, Chen Shihua, statistics department head at the China Association of Automobile Manufacturers, said Saturday at a briefing in Beijing.
That beat the 1.2 million average of seven analyst estimates compiled by Bloomberg.
Sales in May beat estimates for a third straight month, with Toyota and Honda leading growth as factories recovered from last year's tsunami in Japan and floods in Thailand.
CAAM Deputy Secretary General Yao Jie said at the briefing that the industry is becoming more stable.
"Last May was pretty bad in terms of the passenger-car sales tally," Harry Chen, a Shenzhen-based analyst with Guotai Junan Securities Co., said before the latest results were released. "Dealers are very cautious about the coming months and eager to find out whether the government will roll out stimulus policies."
Toyota's China sales in May more than doubled from a year earlier to 78,700 units. Honda reported a 92 percent surge and Nissan Motor Co.'s sales increased 20 percent. General Motors Co., the world's biggest automaker, said this week its vehicle sales in China last month rose 21 percent, driven by demand for its Wuling minivan and Chevrolet models.
Ford Motor Co. saw its passenger-vehicle deliveries increase 23 percent.
"We expect sales growth to remain strong in June," UBS AG analysts Hou Yankun, Xu Ming and Zou Tianlong, wrote in a note on June 6. The government's stimulus policies "could boost consumer sentiment in the short term."
China announced its first interest rate cut since 2008 this week as policy makers seek to bolster economic growth.
The government is also introducing other measures to stimulate consumption, with Premier Wen Jiabao saying May 16 that authorities will allocate 6 billion yuan ($942 million) of subsidies for purchases of vehicles with engines of less than 1.6 liters.
China's cabinet agreed last month to revive financial incentives for consumers to trade in their passenger cars to help increase demand, a government official said last month.
Separately, the finance ministry said last month that the government will spend as much as 2 billion yuan a year to develop alternative-energy vehicles to reduce fuel consumption.
Total vehicle sales, including commercial vehicles and SUVs, for May rose 16 percent from a year earlier to 1.61 million units, the car association said today.
For the first five months of the year, passenger car sales increased 6 percent to 6.33 million units.
China's auto industry will improve further in the next few months, the association's Yao said.