China Volt
Image source: General Motors.

While many investors will be enjoying egg nog and putting bows on presents, the automotive industry will be putting the finishing touches on its global sales figures, and that will show how massive China's new-vehicle market is. North America will likely remain the most profitable auto market for some time, but that hasn't stopped General Motors (NYSE:GM) from tallying up a massive number of sales in China this year.

"With less than a month to go, we are on track for record sales in 2016," said GM Executive Vice President and GM China President Matt Tsien in a press release this week. "All recently launched products, such as the new-generation Buick GL8 and Baojun 310, have gotten off to a very good start of deliveries."

Highlights and figures

In total, GM and its joint ventures tallied an impressive sales figure of 371,740 units in China, a 7% increase from the prior year. GM's umbrella of brands did well, with Cadillac, Buick, and Baojun all notching all-time monthly highs. In fact, Cadillac's results in China continue to impress, with its sales soaring 70% in November to more than 13,400 units -- that's the fifth consecutive month its year-over-year gains checked in higher than 50%.

Buick's sales gains were less impressive, checking in at a meager 1.5% gain, but its volume of sales, at nearly 110,000 units, played a big role in GM's strong month. Chevrolet, which is GM's best-selling brand in the U.S. by a landslide, posted a 2.4% sales increase to 52,400 units in November. GM's Baojun jumped 28% to total 74,779 units sold, and Wuling posted a meager gain of 0.2% but racked up more than 121,000 units sold.

What about the competition?

GM's sales total for November is extremely impressive when you consider it outsold Ford Motor Company (NYSE:F), Honda, and Toyota, combined. Ford's November sales in China were strong, too, checking in with a 17% gain to 124,113 units. Honda and Toyota posted gains of 40% and 6%, respectively, to 126,713 units and 111,100 units.

Because of Honda's push in 2016, it has actually surpassed sales of Toyota and Ford, by the slimmest of margins. Through the first 11 months, Honda's sales moved 28% higher to 1.11 million units, while Toyota's and Ford's gains checked in at 10% and 5%, to 1.10 million and 1.09 million, respectively. Again, all of those competitors significantly trailed GM's year-to-date total of 3.4 million.

A grain of salt

Now, to be fair, China's automotive industry received a shot in the arm during 2016 with the purchase tax cut in half on a new vehicle with an engine displacement smaller than 1.6 liters. That's set to expire at the end of this month, and it could be pulling demand from consumers on the fence about a purchase in the near term to the dealership lots to take advantage of the soon-to-expire incentive.

That means 2017's sales could start off more slowly, but it means other things, too. For instance, these incentives absolutely work, but it also makes it difficult for major automakers and suppliers to adjust for the sales volatility between years. For instance, during 2009 China cut the purchase tax in half, and even amid the economic crisis, light-vehicle sales soared 53%. Then the following year, when it raised the tax slightly, that growth slowed, to a still impressive 33%. When the tax was fully restored to 10% in 2011, sales slowed to 5.2%. Fast-forward to 2016, and through the first 10 months, sales are up 15%.

You could also make the argument that these inflated sales from the tax incentive help keep afloat inefficient autos -- and China has more than you might realize, at around 70 domestic manufacturers at the end of 2015 -- when it would be healthier for the industry to consolidate and create cost synergies.

Yes, China is going to be incredibly important to major automakers' growth stories, including Detroit and Japanese autos alike, but take the massive sales gains this year with a grain of salt. Sales could start off 2017 much slower than anticipated, and until automakers can better match production capacity with wild annual swings in sales, big success in China might not help the bottom line as much as investors would like.

Daniel Miller owns shares of Ford and General Motors. The Motley Fool owns shares of and recommends Ford. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.