An employee guides visitors inside a BMW factory in Shenyang, Liaoning province, July 6, 2013. [Photo/Agencies]

China's auto lobby has urged Beijing to support local carmakers after the regulator said it was considering further opening up the market to outside investment amid a deepening row between policymakers and state-owned car firms.

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Despite foreign carmakers needing to set up joint ventures to produce vehicles for China, foreign brands including General Motors, Volkswagen AG, Ford Motor Co and Toyota Motor Corp still dominate the Chinese auto market.

China's auto lobby is opposed to plans that would relax foreign ownership rules for China ventures, currently capped at 50 percent.

"China should open the sector more to domestic investors rather than foreign capital," Dong Yang, secretary general of the China Association of Automobile Manufacturers, said in a statement on CAAM's website, adding only car firms with a substantial investment from China should be given the "green light".

Volvo is wholly owned by Chinese carmaker Geely Automobile Holdings Ltd, while China's Dongfeng Motor Group Co Ltd agreed this month to buy a 14 percent stake in struggling French carmaker Peugeot SA.

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