By Li Hongmei

Emerging markets will contribute to two thirds of the global car industry's profits by 2020, of which the China market will account for more than half, according to a report from international consultancy McKinsey & Company and the China Securities Journal.

McKinsey said the global car industry has recovered from financial crisis as its profits in 2012 reached 54 billion euros (US$71 billion), significantly higher than the 41 billion euros(US$54 billion) in 2007, a year before the crisis hit. The industry's profits are likely to increase another 25 billion euros (US$33 billion) to reach 79 billion euros (US$104 billion) by 2020 due to stable growth in sales, which are expected to grow by around 3.8% a year.

The sales will tilt toward emerging markets while the economic focus of the industry will also migrate, said Paul Gao, a principal of McKinsey Hong Kong. The main growth momentum will come from sales of compact cars, growing emerging markets and further urbanization. They will help the annual sales of small cars to grow around 5% to 6% a year and contribute to 30 million car sales in 2020.

China is already the world's largest car market with 19 million cars sold in the country in 2012. Although the sales have slowed, the China market still offers alluring prospects for after-sales services such as car accessories, maintenance, secondhand car sales and financing, according to McKinsey's report.