In the race for China's burgeoning car market, foreign makers have the winning brands, but local rivals are in for the long haul and may have a few tricks up their sleeves.

A Reuters report said that, unlike once high-flying foreign mobile phone and electronics makers that had their dreams of big China sales dashed by intellectual property infringement and rules requiring foreign manufacturers to find local partners, motor industry watchers say foreign carmakers are protected by their brands.

"Chinese consumers still very much lean towards foreign brands," Josh Li, managing director of advertising firm Grey Worldwide in Beijing, told the news agency, adding: "I don't think China will ever develop into a Chinese-only market."

Chinese consumers are more likely to happily own a Haier TV or a Bird phone than be seen cruising around in a Chery or Geely car, which are perceived to have lower status than their foreign counterparts, the report said.

Only the richest 1% of China's 1.3 billion population can afford a car, reinforcing the sense of status that supports established foreign brands, industry watchers told Reuters.

The report said that General Motors, China's second-biggest player, tested this theory with an experiment: It launched the same Buick sedan under a Chinese name to see how it would go down with local consumers.

"It turned out that nine out of 10 customers opted for the original version, because of the foreign cachet," GM spokeswoman Daphne Zheng told Reuters.

The report said that local brands make up less than 20% of China's passenger car market and mainly compete in the low-end segments.

While most foreign marques enjoyed stronger-than-expected sales last year as the car market doubled to about two million units, Geely's sales fell about 20% short of its initial target of 100,000 units, Reuters said.

The news agency said the government is believed to be tinkering with its ambitious targets for local market share after impassioned complaints from foreign players.

Insiders reportedly say that under the latest draft of its evolving automotive policy outline, the government has deleted a reference to having pure Chinese brands control half of the car market by 2010.

But Reuters said that foreign car makers aren't taking any chances, filing piracy and intellectual property (IP) infringement cases in a legal environment some fear favours local firms.

Toyota last year lost a suit against Geely for copyright infringement on its logo, while SAIC-Chery's QQ minicar is at the centre of an investigation by GM, which is worried the model is a copy of its Spark and Nissan may take legal action against another local maker, Great Wall Auto, over alleged design piracy, the report said.

Reuters said car makers rely heavily on parts suppliers to provide cutting-edge technology but IP protection is an even bigger headache for parts makers, which guard product blueprints from their Chinese partners.

"We had major problems with IP infringement," Jinya Chen, president of Delphi Corp's Chinese arm, told Reuters, adding: "You really have to find the right partner to ensure you're safe."

Some experts reportedly say it is only a matter of time before local makers can compete with foreigners in product development and engineering.

"Chinese makers have a disadvantage now but this will change," Norbert Wittemann, head of Global Automotive Practice at consultancy AT Kearney, told Reuters, adding: "They're also closer to the customer, and have a better understanding of regional differences."

If and when local firms catch up, foreign carmakers will be left with only their brands, analysts reportedly say.

Most are focusing on building brand loyalty through after-market support, which was virtually non-existent five years ago, Reuters noted.

The news agency said that winning the domestic market is not just about business for China's home-grown carmakers.

"In 1987, when I was working for GM, I told them that China will build our own cars, and they laughed at me," Ed Wong, a design director at Sphere One who has worked for several local makers including Beijing Jeep, told Reuters, adding: "But we will standardise (the process), execute and surpass (the foreigners) with an iconic car. We have pride."