China's auto sales rose 36.6 percent year on year to 10.88 million units in the January-May period as business activities continued to pick up pace amid sustained economic recovery, data from an industry association showed on Friday.

Sales of passenger vehicles increased 38.1 percent year on year to 8.44 million units during the first five months of the year, according to the China Association of Automobile Manufacturers (CAAM).

In May alone, auto sales totaled 2.13 million units, down 3.1 percent year on year.

"China's automobile consumption has remained generally stable in the first five months," the CAAM said.

The new energy vehicles (NEV) market in China has heated up, with its sales surging 220 percent year on year to over 900,000 units during the January-May period. In May alone, NEV sales hiked 160 percent year on year to 217,000 units.

The better-than-expected NEV sales came amid a government push and rising market enthusiasm for eco-friendly cars. In November last year, China unveiled a development plan for its NEV industry from 2021 to 2035 that aims to accelerate the country's transition into an automotive powerhouse.

NEVs are expected to represent 20 percent of the sales of new vehicles by 2025, and vehicles used in public transportation will be completely electrified by 2035, according to the plan.

Auto exports also reported upbeat data, with Chinese car manufacturers exporting 670,000 vehicles in the first five months, up 110 percent from last year. In May, China's auto exports climbed 210 percent year on year to 151,000 vehicles, the CAAM said.

China's automobile consumption is expected to further stabilize with solid support from stable growth at home, the CAAM said, adding that the industry should be cautiously optimistic about its prospects.

The automobile industry might also be faced with challenges, including complex pandemic situations around the world, uneven global economic recovery and an unstable economic recovery foundation, the CAAM said.