China has overtaken Japan to become the world's second-largest car market after the US, official figures show.
Experts believe China could soon overtake the US market
Car sales - excluding people carriers and 4x4s - jumped 37% in 2006, the China Association of Automobile Manufacturers (CAAM) said.
Total passenger car sales rose 30.02% to 5.18 million units, CAAM found.
Analysts said that newly affluent drivers had boosted sales, with some predicting China may overtake the US by 2015 as its economy continues to grow.
Overall, Chinese vehicle sales jumped 25% during 2006 to 7.22m units.
The booming Chinese car market has provided some solace for US vehicle makers suffering from declining sales in their domestic markets.
On Monday, General Motors said total annual sales in China totalled 876,747 units, up 32% on 2005.
Ford sales for the year almost doubled, rising 87% to 166,722 units.
Chinese consumers are not just buying the budget models, with many snapping up luxury cars.
Rolls-Royce, owned by Germany's BMW, reported a 60% jump in Chinese sales.