SAIC, which assembles Volkswagen and General Motors cars, had its own brands Phoenix and Shanghai but stopped their production in 1993 to make way for Volkswagen cars.

Wang declined to reveal brand names of the new cars.

"We have to be very prudent in naming our products. The central and Shanghai governments pay great attention to this regard. Our brand names should be accepted by both domestic and foreign customers."

SAIC is owned by the Shanghai municipal government.

The central government has been urging Chinese companies to develop their own brands and increase innovation capability to sharpen competitiveness in the world market.

"SAIC is the most capable among Chinese carmakers of developing own-brand cars as it is the strongest in talents, capital and management," said Yale Zhang, a Shanghai-based analyst with US auto consultancy CSM Worldwide Corp.

Since the domestic car industry is much weaker than foreign big names in development capability, the bulk of China's car market is controlled by foreign models and most Chinese-brand cars come into play in the low-end segment or have sluggish sales.

Geely and Chery, the two independent Chinese carmakers, produce low-cost cars with annual sales of each exceeding 100,000 units.

First Automotive Works Corp (FAW), the partner of Volkswagen, Toyota and Mazda, sold fewer than 20,000 units of its own brand the Red Flag last year. The Red Flag, launched more than four decades ago, is the oldest existing Chinese car marquee.

Brilliance China Auto, the Hong Kong-listed partner of BMW, reportedly sold merely 10,000 units of its own-brand Zhonghua sedans last year.

China's car market grew by 27 per cent to 3.1 million units last year, of which foreign brands had the lion's share of 70 per cent.