China's output and sales of vehicles both exceeded 5 million in 2004, an increase of 14 per cent over the previous year.

Sales were slightly higher than output.

China aims to develop the auto industry into the pillar of the national economy and by the end of 2010 the country is expected to become the world's third largest auto maker.

But with the market scale expanding in the past few years, China's auto industry still lags behind as a whole.

Most factories in China can manufacture less than 10,000 vehicles a year.

Insiders predict that acquisitions and restructuring of China's auto industry will occur in the future.