General Motors has announced its intention to supplant Volkswagen AG as the dominant motor company in the Chinese market.

So bullish is General Motor's intention that the president of Automotive Resources Asia, Michael Dunne, declared: "Now its war."

General Motors (GM) would gain much were it to achieve its stated aim, as Volkswagen (VW) last year sold more cars, and made more money, in China than in Germany.

Even given the dominance of VW, China was still GM's fourth largest market last year, and the CEO of General Motors China, Phil Murtaugh, has predicted that the Asian country will this year become the second largest of these markets.

Mr Murtaugh told Automotive News: "We believe GM can ultimately claim the largest share of this growing market."

GM is planning to raise its Chinese production from 530,000 now to 1.3 million in 2007, and will launch 20 new and upgrade offerings in the next three years.

Capacity at its flagship Shanghai facility will more than double from 200,000 to 450,000.

However, with VW saying it wants to retain 30 per cent of the Chinese market, the rivalry between the two motor giants is set to simmer for months to come.

VW plans to double its capacity in the region, commanding an annual output of 1.6 million by 2008.