Reuters reports that data from the China Association of Automobile Manufacturers (CAAM) showed that auto sales in China surged in March for their 12th consecutive month of gains, as the world’s biggest car market leads the sector’s recovery from the COVID-19 pandemic.

Sales reached 2.53 million vehicles in March, up 74.9% year-on-year. Sales of new energy vehicles (NEVs) increased 239% in March to 226,000 units.

NEV makers, such as homegrown Nio Inc and Xpeng Inc, as well as foreign groups, such as Tesla Inc, are expanding manufacturing capacity in China as it promotes greener vehicles to cut air pollution.

Chen Shihua, a senior executive at CAAM, said the industry body expects the chip supply shortage to have bigger negative impact on China’s auto production in the second quarter than in the first.