July marked the second straight month of growth, after a 2.3 percent increase in June, according to the China Association of Automobile Manufacturers.
Sales last month got a boost from crossovers and SUVs, with 689,500 of those vehicles delivered across China, up 18 percent from a year earlier.
Sales of other segments remained weak in July. Sedan sales edged down 0.3 percent to 824,900 vehicles, minibus sales plunged 39 percent to 27,500 while multipurpose vehicle deliveries fell 11 percent to 136,500.
For the first seven months, light-vehicle deliveries increased 2.0 percent year on year to more than 12.9 million vehicles.
At the beginning of the year, the central government raised the purchase tax on vehicles with engine displacements of 1.6 liters and smaller to 7.5 percent from 5 percent.
The government will restore the tax to its normal 10 percent next year.