Volkswagen AG says the Chinese automotive market is expanding rapidly, with car sales in the area delivering a strong performance for the first half of the year.

According to the vehicle manufacturer it sold 62 per cent more cars during the first five months of 2003 in comparison to last year.

A spokesman for the joint venture between domestic carmaker Shanghai Automotive Industry and Volkswagen, named Shanghai Volkswagen Automotive, said sales had continued to grow, as the commercial possibilities opened up.

'Our aim this year is to produce 390,000 cars,' the spokesman said, predicting a 30 per cent increase on 2002.

'We hope to make 700,000 cars annually by 2007,' he added.

Analysts say Volkswagen appears to be firmly on track to meet a target of selling 600,000 cars this year, providing encouraging respite from sales in other major markets across the globe.

Foreign car makers have increasingly turned to China, where more than one million cars were sold in a year for the first time in 2002, as demand in other regions has weakened.