Car output in China has continued its meteoric rise with the month of July delivering a 70 per cent increase on the same period the previous year.

A total of 170,900 units were shifted in July, marking the second-highest month of 2003.

Output over the first seven months in the world's fastest growing major car market has now risen by nearly 95 per cent year on year to 1.07 million cars.

Already that total surpasses the entire production for 2002, the State Statistical Bureau said.

With both local and foreign competitors now seeking to ramp up production further, some analysts expect the country to produce more than two million cars this year.

The bureau itself warned of potential price wars as a result of the level of production, revealing that a 'spate of new models has already been put into mass production'.

Foreign automakers and their Chinese partners recently announced capacity increases that could lift annual production to about 2.28 million vehicles by 2007.