China's car sales inched up 1.3% in the first two months of 2025 from the same period a year earlier, as an expanded customer subsidy programme spurs auto demand while a new smart electric vehicle price war unfolds.

Passenger vehicle sales rose 26.1% year-on-year to 1.41 million units in February, following a 12% fall in January, data from the China Passenger Car Association (CPCA) showed on Monday.

The timing of the Lunar New Year celebrations, the country's largest annual holiday, which fell in late January compared with February last year, disrupted production and consumption activities.

(Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh; Editing by Jacqueline Wong)