For many years Chinese brands were regarded as low-end, substandard products as many were unreliable. Over the past year local brands started moving into the more lucrative high-end sedan market, Jiang said.

CAAM figures also reveal a solid position held by indigenous brands on commercial vehicle front as their market share for buses and trucks had hovered around 95 percent for three consecutive years.

Chinese brands held 57 percent of auto China's market when passenger cars, sports utility vehicles and multipurpose vehicles and commercial vehicles, were counted as a whole.

In the first quarter this year, China's auto output and sales soared more than 20 percent to 2.19 million and 2.12 million vehicles respectively. Monthly output in March hit a record high of 853,800 as did sales which topped 847,00 units, CAAM figures reveal.

Looking to the future, Jiang said that technical innovations by local auto makers should focus on gas saving and emission reduction. Approximately 85 percent of the country's annual total gasoline consumption and 23 percent of diesel oil consumption were used by automobiles, he said.

"Now that China has grown to be the world's third biggest auto maker, its indigenous industry has to face more and more challenges, especially in energy, environment and road safety," Jiang said.

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