competitiveness as the market matures.

Market potential

Automakers have struggled for years to keep up with soaring demand in China. Since the country joined the World Trade Organization in 2001, automobile sales have grown at an average rate of more than 20 percent year-on-year.

Fueled by the central government's stimulus measures, including tax reductions for small cars with engine capacities of 1.6 liters or less and subsidies to encourage farmers to trade in old, oil-guzzling vehicles, sales in 2009 surged 46 percent from the previous year to 13.6 million units during the global financial crisis.

That year, for the first time, China overtook the US as the world's largest automobile market.

The number of cars and light trucks sold in China was just one-tenth of that in the US in 2000. Yet, in 2010 domestic auto sales jumped 32.37 percent to 18.06 million units, the highest annual sales in the global automotive history, according to the China Association of Automobile Manufacturers.

The figure far outstripped the expected 11.5 million units of sales in the US, although arguably more impressive is the fact that, within two years, China nearly doubled total auto sales from 9.38 million.

However, the unexpected growth rate has caused problems for Chinese consumers, however.

"I never imagined buying a car was so difficult," said Yang Jing, 31, an events manager in Beijing. "I was told by different brands to wait several months to get a car or pay a lot of extra money to shorten the wait."

Consumers' enthusiasm for cars led to almost all automakers expanding production capacity, with some building brand new plants.

Analyst Jia Xinguang urged automakers to beware "risky expansions" this year, as he predicts the market will shrink after recent national and local policy changes.