The McKinsey report predicted that the share of small cars will drop from 23 percent to 19 percent by 2020, while larger models' percentage will increase to 8 percent from the current 5 percent.

"Chinese customers have become more sophisticated and discerning, and they will be able to afford more expensive cars as incomes rise," said Liao.

China has become a major battle ground in recent years for nearly all the world's major automakers, as they fight to break the traditional dominance of Japanese brands in the market.

A number of international names are showcasing their latest models at this week's Guangzhou auto show, including Hyundai, Citroen, Volkswagen, BMW, Mercedes-Benz, General Motors, and Ford.

Organizers said that 950 models will be on display, 50 more than last year, with 34 making their global premieres and 23 their Asian debuts - both records in the show's 10-year history.

According to reports, highlights are expected to be the Volvo Cross Country, the Jaguar F-Type unveiled at the recent Paris auto show, and the latest version of the Santana from Shanghai Volkswagen.

lifangfang@chinadaily.com.cn