China's first modern automaker was founded in 1956 in the northeastern province of Jilin, and first Chinese-foreign joint venture was established in 1984 by Shanghai Automotive Industry Group Corp (SAIC) and Volkswagen AG. The industry has seen rapid expansion since annual output exceeded one million units in 2002.
China makes a complete line of automotive products, including cars, vans, buses, trucks, auto-parts and accessories. In 2012, 19.27 million vehicles including 15.52 million passenger cars were produced in China, up 4.6% and 7.2% respectively from the previous year. Major domestic passenger car manufacturers include SAIC, Guangzhou Automobile Group Co (GAC), China First Automobile Group Corp (FAW), Dongfeng Motor Corp, Chongqing Changan Automobile Co, Geely Automobile and Chery.
China overtook the US for the first time as the world's largest auto market in 2010, during which it sold over 18 million vehicles. In 2012, 19.31 million vehicles including 15.5 million passenger cars were sold in China, up 4.3% and 7.1% respectively from the year before. Japanese branded cars sold 2.19 million units (up 21.6%), German branded cars sold 2.15 million units (up 21.3%), US branded cars sold 1.52 million units (up 15%), South Korean branded cars sold 909,000 units (up 9%) and French branded cars sold 404,100 units (up 4%).
The leading Chinese-foreign joint ventures include SAIC with Germany's Volkswagen and the US's General Motors, GAC with Japan's Toyota and Honda, FAW with Toyota and Volkswagen, Dongfeng Motor with Japan's Nissan and France's Renault and Citroen, Chongqing Changan Automobile with the US's Ford, and Beijing Automotive Group with South Korea's Hyundai.
Air pollution and traffic congestion are major obstacles for growth in China's auto industry. Auto sales growth slowed significantly to 3.4% in the first half of 2011 from a year earlier. The government has introduced a string of incentives to develop renewable energy-powered or electric vehicles but the efforts have been stymied by technological bottlenecks and a lack of strong consumer demand.
China currently imports and exports about one million vehicles each per year. Most of the imports are luxury cars and SUVs from advanced economies while most of the exports go to emerging markets in South America, the Middle East and Africa.