China’s car sales will climb a sharp 47% over the next two years as rising incomes, declining import tariffs and more investments by foreign car makers drives demand, ING Financial Markets said on Wednesday, according to Reuters.

Reuters said that ING told an industry briefing that 3.2 million vehicles were sold in 2002 and it expected the number to leap to 4.7 million by 2004.

“Growth is being driven by the fast-growing sedan segment, which accounts for 35 to 40% of total industry sales volume in China,” ING analyst Peter So said in a report, according to Reuters.

Reuters said the report said that China would become one of the world’s top five car producers by 2004, behind the United States, Japan, Germany, France and just ahead of South Korea.

According to Reuters, ING said there were risks for both foreign and domestic players in China’s car market. These included excess capacity in the non-sedan car segments, price wars and falling margins, as well as changing government policies and bureaucracy-related delays.