China will probably surpass the U.S. to be the world’s biggest market for luxury cars as early as 2016 and equal to that of Western Europe by 2020, led by increasing income in the country, according to a new report put out by McKinsey & Co.

The country is expected to see demand for luxury sedans double to 3 million by 2020 from the 1.25 million cars sold in 2012, and the number will probably reach 2.25 million by 2016, the report said.

China’s premium car market leaves plenty of room for late-comers such as Japanese and U.S. automakers, according to the report.

Growth of luxury car sales in China accelerated to 36 percent annually last year, compared with the 26 percent rate for the total passenger-car market, the report said.

German brands accounted for 80 percent of luxury cars sold in China last year, while the country’s 111 large cities still lack premium car dealerships, the report said.