The world's largest car market, China, has indicated it will follow countries like France and Britain in moving to ban the sale of new petrol and diesel engines.

Key points: China has indicated it will move to ban petrol and diesel engines

China has indicated it will move to ban petrol and diesel engines The ban follows France and the UK, who will do the same by about 2040

The ban follows France and the UK, who will do the same by about 2040 Local industry figures say it could signal a revival of Australian auto manufacturing

The Chinese Government has not said when the full ban on petrol and diesel car sales would take effect, but other countries like the UK and France aim to do it by about 2040.

The decision could see China, which makes and buys more cars than any other country, send shockwaves across the global auto manufacturing sector.

"The message would be out there, and all the other the manufacturers in the world that want to sell in China desperately will realise that the writing is on the wall," industry analyst Gary Glazebrook said.

"[Petrol engine manufacturers] will essentially be crowded out or legislated out of the market unless they switch to electric cars."

Professor Glazebook thinks China can implement the ban much sooner than European markets.

"The thing that has been holding it back up until now is the cost of electric cars and the fact that they didn't have enough range," he said.

"Well, the cars that are now on the market do have enough range and battery technology has been improving and getting cheaper, so we've reached that tipping point I think.

"To completely ban the sale of other than electric cars, I can see that they could do that with in perhaps 15 to 20 years."

It is a decision that has global implications for suppliers to the Chinese market, like Australia, where Toyota and Holden are due to close their last plants by the end of October.

But Australia's vehicle manufacturing and car parts industries will still be worth tens of billions of dollars to the economy, thanks in part to the Chinese market.

China ban could boost Australian manufacturing

According to the body representing Australian car parts manufacturers, the ban is good news for Australia and could even see a revival of local car manufacturing.

Even so, Federation of Automotive Parts Manufacturers executive director Geoff Gwilym acknowledged there were fewer parts to sell to make an electric car.

"Currently those manufacturing operations make up more than 2.6 per cent of GDP in Australia, and it will still be around 2 per cent of GDP even when Toyota and Holden have finished their car-manufacturing operations," Mr Gwilym said.

"I think we could enter an age where we manufacture cars again, because it becomes a simplified process to some degree.

"Generally speaking, electric engines have got about 17 moving parts as opposed to hundreds of moving parts in either diesel or petrol engines."

As the world is making more cars and as electric cars become easier to make, Mr Gwilym sees opportunity for Australia.

"You are [competing with lower-wage markets like China], but automation will change a lot of that," he said.

"You don't have a casting plant, you don't have a machining plant, you don't have a plant that has to make engines.

"And if you attach to that different types of manufacturing technologies and robotics, then my view is that we will be able to make cars again."