The world's largest car manufacturers are increasingly competing for a slice of the cake in China's rapidly expanding auto market, with the region continuing to evince strong growth despite a slowdown in the rate of expansion.

General Motors (GM), the world's biggest car company, has overseen an 8.4 per cent rise in Chinese first quarter sales.

China is now GM's second biggest market, where it holds a 10.4 per cent share, with the firm confident of continued growth.

A spokesman for GM in Shanghai, Chris Gubbey, said: "For the year as a whole, we expect profitability and margins to remain healthy, but a bit lower than in years past when there has been less competition."

And competition is hotting up in an indication of the potential in the region: rival manufacturer Ford has announced plans to build a new engine plant in China, a joint venture with local firm Changan.

GM also has major investment plans, intending to inject $3 billion into its Chinese operations by 2007.

Nevertheless, the rate of growth is easing off, with vehicle sales in China falling by 1.16 per cent to 1.27 million in the first three months of the year.

This is on the back of booming sales in 2004, which doubled the previous year's total.