China's passenger vehicle sales may hit 4 million units this year, making it the second largest auto consumer in the world after the United States, the China Business News reported on Monday.

According to figures from the China Association of Automobile Manufacturers, China's passenger vehicle sales soared to an all-time high of nearly 1 million units in the first three months this year.

Most of the automakers saw their sales surging by over 60 percent in the first quarter.

Shanghai General Motors sold 89,513 cars in the first three months, followed by Shanghai Volkswagen's 86,474 units.

Chinese brand Cherry ranked the third selling 70,438 cars.

The report attributes the remarkable growth to strong market demand reinforced by the new tax regime that encourages the consumption of small cars.

China's passenger vehicle sales exceeded 3 million units for the first time in 2005. The report predicts that the sales of this year may hit 4 million units.

If that happens, China could overtake Japan to become the second largest motor consumer in the world, the report says.