"The Chinese auto industry is likely to reach a peak of 50 million units over the next decade," said Liu Shijin, deputy director of the Chinese Cabinet's Development Research Center.
While there has been a slowdown this year, Liu said consumer demand will remain strong and that sales by 2021 could even top 60 million vehicles a year, China Daily reported.
The newspaper said both vehicle production and sales surpassed 18 million units last year, up 38 percent over 2009.
Growth in the first six months of this year has been just 4 percent, but Liu said sales could grow by 10 percent by year-end, adding the auto sector would enjoy a growth rate higher than most other sectors.
China could also become a major auto exporter in the coming years.
China is concentrating on developing electric vehicles, but one expert warned without "major breakthroughs, mass production of electric vehicles is still a problem, not only in China but also in the world." One needed breakthrough would be to make significant progress in energy density in lithium batteries, while also cutting their costs.