Although China is expected to continue to dominate in production of commercial vehicles globally over the next five years, far bigger challenges of tighter emission standards and upgrades to high-tech vehicles awaits its auto makers, a latest industry report showed.

The report by AlixPartners, a global business advisory firm, said that demand from emerging markets as well as its home market will ensure that China remain the dominant producer of commercial vehicles globally.

But it cautioned that Chinese producers will have to meet the higher emission norms and boost its upgrading capability because they now focus on low and middle-technology vehicles at lower prices.

China accounted for 49 percent of the world's total global commercial truck production in 2009 after posting an annual 22 percent growth, the only major market to expand strongly. Among the top 15 global commercial truck suppliers, five come from China, including Dongfeng, FAW and Foton.

China is expected to continue to lead the market by 2014 by contributing around 37 percent of the world's production, boosted by its expanding economy and the government's stimulus economic policies, the report said.

But China also faces regulatory challenges in developed markets while demand in emerging market is seen shifting from low-tech to middle-segment vehicles due to rising energy prices, tighter emission rules and safety regulations, according to the report.