Auto output hit 1.44 million units, up 10.03 percent from one year earlier, according to a statement on the CAAM's website.

Sales of passenger vehicles hit 1.12 million units, up 10.71 percent year on year, while production hit 1.18 million units, up 12.79 percent, the data showed.

However, sales of commercial vehicles slid 1.63 percent to 259,200 units, while commercial vehicle output declined 1.32 percent to 252,300 units, according to the statement.

China's automobile industry expanded exponentially in 2009 and 2010. The nation overtook the United States to become the world's largest auto market in terms of sales in 2009. Sales continued to surge in 2010, jumping more than 32 percent to hit 18.06 million units.

However, sales growth became more moderate last year due to the slowing of the economy and the expiration of policy incentives for car purchases.

CAAM said last month that the country's auto sales are likely to rise by 8 percent to 20 million units in 2012 if the economy picks up momentum in the second half.

In the first seven months of 2012, China's auto sales expanded by 3.56 percent year on year, while output increased 4.84 percent.

The top 10 auto producers sold 9.68 million vehicles in the first seven months, accounting for 88.15 percent of the country's total sales, the data showed.

In July, some 411,600 million domestic-brand passenger vehicles were sold, up 12.6 percent year on year. However, their market share fell to the lowest level in almost three years due to fierce competition from producers in Germany, Japan, France and the Republic of Korea, according to the statement.

The nation's vehicle exports surged 21.9 percent from one year earlier to 89,300 in July. On a month-on-month basis, auto exports fell 16.8 percent from June.

Auto shares rallied Thursday with the entire board rising 1.27 percent, as better-than-expected sales lifted market sentiment.

Great Wall Motors Co. jumped 4.67 percent to close at 15.7 yuan per share, while SAIC Motor Corp., the nation's largest automaker, rose 1.78 percent to finish at 12.73 yuan per share.