China will now have to amend its tariff policies on car parts or face the possibility of punitive trade sanctions after the World Trade Organization rejected its appeal of a dispute panel's ruling in July on import tariffs.

But analysts say that the effect on the domestic auto industry would be minimal since many multinationals would still prefer using local car parts to imported ones even if the Chinese government lowers the tariff over some auto parts as per the ruling.

WTO's final ruling marks the first time the country has lost a legal trade dispute since joining the global trade body in 2001.