Car giants Hyundai and Honda are reaping the rewards of joint ventures with Chinese firms.

China is a potentially huge market for motor manufacturers. Thanks to the unrivalled economic growth of reason years, more people are able to afford their own cars.

Foreign car giants have found that ventures with domestic companies have enabled them to tap into this demand while meeting China's foreign investment criteria.

Hyundai has launched a joint venture with Beijing Automotive Industry Holding Corp called Beijing Hyundai, while Honda has teamed up with Guangzhou Automobile Group to form Guangzhou Honda.

The two companies sold more cars in China than any of their competitors during the first quarter of 2005.

"Beijing Hyundai and Guangzhou Honda already showed much stronger growth momentum than their rivals last year," automotive analyst Yale Zhang told the Xinhua news agency.

"Their small and medium-sized products are more attractive than others in many aspects, such as prices, fittings, fuel economy and appearance."

The world's largest carmaker, GM, meanwhile saw first quarter sales at its Chinese venture, Shanghai Automotive Industry Corp, slump 35 per cent.