The present article presents an introductory overview of the recent developments of the auto industry in China in terms of macroeconomic indicators and overall market situation, with an insight on the major taxes impacting companies and individuals operating in this industry. It develops practical numerical scenarios showing how taxes can affect different corporate business models and strategies and finally ends with an overview of the most relevant general regulations involving exports, environmental protection, future technological developments and China’s 2012-2012 plan for the new energy automotive industry.