"The industry's concentration rate is still increasing because the top players are making efforts to have stable and sustainable growth," said Jia Xinguang, an independent Beijing-based auto analyst.

"They are well on track to achieve the target set by the Ministry of Industry and Information Technology recently, which asked for the top 10 automakers to contribute 90 percent of overall domestic sales by 2015."

The SUV category saw a year-on-year growth of more than 40 percent in the first half with deliveries of 1,329,788 vehicles, while sedan sales also saw solid growth in the period, up 11.69 percent year-on-year to 5,841,270 cars. The multi-purpose van segment surged 128.18 percent from a year earlier to 567,524.

"The SUV segment has seen dramatic changes in the first half. The mainstay Japanese brands, which previously enjoyed strong growth, saw an increased loss of market share while other brands have seen a sudden hike," said Chow.

Audi's SUV models, built under the FAW-Volkswagen joint venture, have seen strong growth, as the brand introduced the Q3 model to its lineup in addition to the existing and larger Q5. In the first six months, Audi SUVs saw sales of 60,220 units, up 43.91 percent year-on-year.

Mercedes-Benz's SUV model, the GLK, which is built by the Beijing-Benz local plant, saw sales of 17,628 units in the first half, up 158.4 percent from last year.

Chow believes that SUVs will continue to see strong growth while sedan sales growth will moderate in the second half of the year.

Dong Yang, general-secretary of the CAAM, said the association is still keeping its "earlier estimate of a 7 percent annual growth for 2013, with overall sales of 20.8 million units, because there are still many uncertainties in the market in the second half". However, Cui Dongshu, deputy secretary-general of the China Passenger Car Association, was more optimistic and estimated an 18 percent year-on-year vehicle sales growth.

IHS Automotive forecasts an annual production growth of 10.4 percent in China in 2013, with total production to reach 20.4 million vehicles.

Exports slow down

The Chinese vehicle export market saw fabulous growth in 2012, with the total number of vehicles exported for the first time outstripping the 1 million unit barrier, up 29.7 percent on an annual basis.

However, in the first six months, the market saw a rapid slowdown. A decline of 29.16 percent in June made the first half increase sharply drop to 2.29 percent from the same period last year, with 294,283 vehicles exported.

Chery Automobile Co - China's top exporter - saw the number of vehicles exported drop 24.82 percent to 68,246 in the period, while the country's second-largest exporter, Zhejiang Geely Holding Group Co Ltd, saw exports drop 28.64 percent.

"Chinese automakers are facing challenging times with declining sales for most local brands. With the decline in exports, these brands will now likely look to cut production," said Boni Sa, a light vehicle production analyst at IHS Automotive.