Carmakers from China and around the world unveiled their latest products Monday at the Shanghai auto show, in a burst of glitz and glamour that contrasted with recent, more sober US exhibitions.

From international marques like Mercedes to up-and-coming domestic carmakers such as Chery, more than 1,500 manufacturers were on hand for the first media day at industry show Auto Shanghai 2009.

The show represents the growing importance of China's more than 1.3 billion people and a market that overtook the United States three months ago as the world's biggest for car sales.

"We treat this as one of our most important shows," said Helmut Broeker, chief executive officer of Porsche China.

"This is the first time we have launched a product line in Asia and outside our core countries."

He was referring to the Panamera, a four-door sports car making its international debut in Shanghai whose turbo version will cost about 2.5 million yuan (370,000 dollars) including taxes in China.

At a time when the global financial meltdown has pushed other auto markets to the brink of collapse, the Shanghai show was set to feature the global or Chinese launches of at least a dozen cars.

Audi launched its A3 luxury sedan while other models set to be unveiled to the world at the show include the Mercedes S400 Hybrid, which combines a petrol engine with a lithium-ion battery, and the BMW X5 M, a sports activity vehicle.

Ford Motor company put on a Hollywood-style presentation Monday, lowering its four-door Fiesta, a new product for the China market, onto the stage from above, surrounded by models clad in black leather in a display reminiscent of "The Matrix" and "Mission Impossible" films.

"China is a very critical market for Ford Motor company," John Parker, Ford's executive vice president for Asia Pacific and Africa, told AFP.

Ford aims to sell 250,000 units in China this year, accounting for about half of sales in Asia, Parker said.

China's own auto makers were also aiming to grab headlines with launches of the subcompact Roewe N1 from SAIC Motor Corp. and the Riich M1 from Chery, a subcompact.

Embattled US auto manufacturer General Motors, on the verge of bankruptcy at home, said the Chinese market was critical for the global auto industry.

"The Shanghai show is certainly one of the most important shows in the world now and reflects the size of the Chinese market and the breadth of the competition here," GM Asia Pacific President Nick Reilly told reporters.

The company aims to double its sales in China over the next five years.

The head of Honda's China operations, Atsuyoshi Hyogo, echoed similar sentiments.

"We are seeing a major shift in the battleground within the global automobile market from the US to China," Hyogo said.

Previously China was not expected to become the world's number one market until 2015, but the economic downturn and plummeting sales in the United States accelerated that development.

China's monthly car sales surpassed the United States for the first time in January, when a total of 735,000 were sold in China, compared to 656,976 vehicles in the United States.

China's auto sales then hit a monthly record of 1.08 million units in March.

China is expected to stay number one for at least the next few months and could even stay in that position, said Klaus Paur, head of auto research for TNS China.

"This is where (auto manufacturers) sell their cars and make up for a lot of losses in the other markets," he told AFP.

earlier related report

Hobbled US giants face China carmakers in Shanghai

Troubled US auto giants will square off against Chinese newcomers in Shanghai this week as they try to pull ahead in what has suddenly become the world's number one car market.

Despite seeking government life support at home, Ford Motor Company and General Motors Corp had banner months in China, which has overtaken the United States to be the world's largest auto market for three months running.

But Chinese manufacturers such as Geely and Chery also had strong months and, sensing blood in the water, they see a chance to break out as global names.

"The economic slowdown offers real opportunities for Chinese domestic car makers," said Klaus Paur, automotive director for research firm TNS China, ahead of Monday's start of the Shanghai international auto show.

Government incentives, such as tax rebates on smaller engine cars, helped drive China's auto sales to a monthly record of 1.08 million units in March.

Vehicle sales in the first quarter rose almost six percent from a year earlier to 2.64 million units, according to official figures.

Despite strong first quarter sales, 45 percent of prospective car buyers in China postponed purchases due to concerns over the economy, and a quarter have cut their budget, according to a TNS survey of more 1,000 mainland consumers.

These factors favour Chinese carmakers, who typically make cheaper vehicles than their foreign competitors, according to Paur.

"They can benefit from the cautious consumer behaviour and position themselves as attractive alternatives to foreign brands," he said.

Nevertheless, GM said it set a monthly sales record in China last month and has announced plans to double its annual sales here to two million units within five years.

"We're pretty well-placed to do a lot of growth at the moment without having to spend a lot of money," Kevin Wale, head of GM China Group told the Wall Street Journal last week.

Ford is also aggressively pushing forward in China, promoting cars such as its four-door Fiesta, which benefit most from Beijing's small engine rebates.

Meanwhile, their Chinese competitors are trying to gain a foothold on the US giants' traditional territory.

Independent Chinese carmakers Geely Automobile and Chery Automobile both plan massive displays built around their first American-style luxury sedans.

Geely will showcase its high-end "Emgrand" while Chery will tout its upmarket "Riich G6", which will initially be aimd at the Chinese market but which the makers hope eventually to sell in the United States and other developed countries.

"We've targeted the international stage from the very beginning," Chery said in a statement issued on Friday.

Chinese car makers are also set to showcase electric and hybrid cars as they seek to beat their US rivals on the environmentally friendly front at home and abroad.

However, despite Chinese automakers' bluster, a global brand has yet to emerge from the country's fragmented car industry, comprising more than 100 manufacturers, many propped up by regional governments.

The central government has repeatedly called for consolidation, but restructuring experts Alix Partners sum up the progress so far as "much hype and very little action".

Auto parts makers, which unlike car manufacuters often do not have government support, look shaky with more than 40 percent saying they fear severe liquidity problems and some may collapse, an Alix Partners study said.

Failing suppliers will have a knock-on effect on car makers, Alix Partners China managing director Ivo Naumann said.

"If your production process stops for one day because one of your suppliers can't deliver or went out of business you will have significant problems because you are incurring costs that are enormous," he said.

He predicted the industry consolidation would start with suppliers over the next 12 to 24 months.

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