Although growth in China's vehicle market slowed down in 2011 and 2012, car capacity still increased rapidly from 90 million to 120 million units. However, there may be problems on the road ahead, Rao said.

"Traffic will be a big challenge for the government. Based on an average annual growth of 5.5 percent over the next decade, China's vehicle capacity will pass 270 million in 2020, triple the number of 2010, while the country only plans to expand roads by no more than 30 percent during the same period,'' said Rao.

BMW said that its sales, including the Rolls-Royce and Mini brands, surged 40 percent from a year earlier to 326,444 units in 2012, backed by record monthly growth of 73 percent in December.

Volkswagen's premium brand Audi also reported a 29.6 percent year-on-year growth in 2012 to a record 405,838 vehicles.

Both of the German luxury brands see China as their largest market.

China also became Jaguar Land Rover's top market in 2012, as the British premium brand delivered 73,347 imported vehicles to Chinese consumers, 74 percent more than in 2011.

US automaker Ford said that its China sales performance boomed 21 percent from 2011 to a total of 626,616 vehicles last year, and General Motors local joint ventures managed to sell 2.85 million vehicles in 2012, representing an increase of 14.7 percent.

All Japanese automakers reported negative growth in China in 2012.

Contact the writer at lifangfang@chinadaily.com.cn

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