Wagoner said GM and its joint ventures will continue to invest an average of $1 billion annually in China.

He said GM is also looking to source more parts from China for its global operations, taking advantage of the emerging high-quality and low-cost supply base in the country.

Yet he cautioned that "energy for automobiles is one of the core energy and environmental challenges facing our world todaywith a market that shows no signs of slowing, China is being impacted more than most".

On Saturday, GM opened an automotive energy research center in Beijing jointly with its partner SAIC and Tsinghua University.

Wagnoner said the goal of the center is to develop an automotive energy strategy that will drive China away from its reliance on petroleum-based fuels and toward sustainable transportation.

GM will bring three of its fuel-cell hydrogen-powered cars into China in the second half of this year for testing in this market, he said.

A third of petroleum consumed in China is used for automobiles. It is estimated that the nation will need over 250 million tons of oil for transportation by 2020.

Fredrik Arp, CEO of Swedish premium car producer Volvo Cars Corp, predicted China is expected to be among its top 10 markets in the future thanks to a strong demand in the country.

To meet with the constantly growing demand for premium cars in China, Volvo is planning local production of the S80 sedan, its flagship model. Sources from the company said a modified version of the S80 will be made in China next year. Volvo started assembling its S40 compact sedan in China in 2006.

"The already successful S40 production, together with the modified S80 in the future, means that our Chinese production base is the most important outside Europe," Arp said.

He said that after it starts local production of the S80, Volvo will evaluate if the parts and components sourced in China also can be used on the cars it produces in Europe.

German carmaker Volkswagen is displaying 31 new models at the Beijing auto show with two locally developed compact models making their global debuts.

The two models will be put into production at Volkswagen two joint ventures in China this year.

Winfried Vahland, Volkswagen's China chief, said the group aims to sell more than 1 million cars in the country this year, up from 910,491 units in 2007.

As the sole official automotive partner of the Beijing Olympic Games, Volkswagen will provide 5,000 vehicles to serve the sports event.

At the same time, Chinese carmakers are competing for limelight.

Chery, the top indigenous passenger car brand, is flaunting a record 29 new models at a record area of 2,500 sq m in a same exhibition hall with Japan's Toyota, which offers 50 vehicles.

Chery's cars on display include five powered by diesel, hybrid petrol-electricity, fuel cell and other new energy resources.

It aims to move 480,000 vehicles this year, up from 381,000 units in 2007.

Great Wall Motors, the emerging SUV and pickup producer listed in Hong Kong, is displaying 16 models in a booth of 1,800 sq m at the auto show.

(China Daily April 21, 2008)