The RV model comes out one year after the joint venture began producing the Sail compact sedan.

According to Chen Hong, general manager of Shanghai GM, the RV's launch is part of an effort to respond quickly to local market changes to remain competitive after China's entry into the World Trade Organization.

Both the RV and the compact sedan cater to Chinese families, Chen said.

"Development of the family car is a priority since it has great growth potential in the Chinese market," Chen said at a launching ceremony for the RV.

Shanghai GM has announced it will introduce a new model every year to meet the local changing demand.

The price range of the RV is between 122,500 yuan (US$14,800) and 135,500 yuan (US$16,500), compared with that of the Sail compact sedan between 100,000 (US$12,100) yuan and 125,000 yuan (US$15,100).

The four-seat model comes with a 1.6-litre engine that can satisfy the European II emission standard.

Analyst said recreational vehicles will become increasingly popular in China and are expected to achieve an annual growth of at least 25 per cent on the market in coming years.

Chen said Shanghai GM had sold about 21,000 Sail compact sedans this year.

Competitions is growing in the market for compact cars for Chinese families, so more foreign automakers will bring such models into their Chinese joint ventures.

Germany's Volkswagen AG will launch its newly developed Polo in Shanghai Volkswagen at the beginning of next year.

Also next year, Japan's Toyota will introduce Vitz, its global strategic compact car, into its joint venture in North China's Tianjin

And at the end of this year, Fiat of Italy plans to begin manufacturing its Palio at a plant belonging to its Chinese partner, Nanjing-based Jiangsu Nanya Automobile Co.

(China Daily November 21, 2001)