General Motors sees vehicle demand growing furiously in China and the company's Asian head said the appetite would remain voracious as he played down concern about excess capacity, Reuters reported.

"Right now the market is racing forward and demand is outstripping the capacity being added," Fredrick Henderson, president of GM's Asia-Pacific region, told Reuters in an interview on Sunday.

He reportedly said the Chinese market would grow to 4.4 million units in 2004 from last year's 3.4 million units.

Reuters noted that, last month, vehicle industry consultant KPMG said China, the world's fastest-growing car market, would face major overcapacity problems within two years while foreign car makers have announced plans to spend $US10 billion in China in the next few years, hoping to cash in on one of the world's few growth regions.

Capacity has grown to 2.7 million units this year, Reuters said, while sales are expected to break the two million mark by the end of the year - car output in the first eight months of 2003, has already surpassed 2002's annual production of 1.09 million.

KPMG reportedly said overcapacity was expected to rise to 2.3 million units by 2005.

"That can happen, mathematically," Henderson told Reuters, referring to the possible glut, but added: "Not all capacity is the same, it depends on what the customer wants."

Henderson, in Bangkok for a gathering of business leaders on the sidelines of an Asia-Pacific summit, was upbeat about another Asian giant, India, which was seeing a growing consumer shift to cars from motorbikes, Reuters said.

"India is beginning to realise its potential...it's growing nicely," he reportedly said.

The half million-plus Indian annual car market is expected to grow at 10% a year for the next 10 years and General Motors expects its share to grow to 8-9% from 2% now, after launches of several more models, Reuters added.

"I would say GM is realising what it would like to achieve in India, the Optra launch went nicely...we have additional products in the pipeline," Henderson told the news agency.

Reuters said he did not reveal plans for the small-car segment, where General Motors did not have a presence as yet, saying only: "We don't have a product in that category today and we continue to look at what the options might be."

Reuters said the mini-car segment comprises nearly 80% of the aggregate Indian car market which is dominated by Maruti Udyog Ltd with an overall market share of 51%.

"Maruti is a very strong player in India and GM owns 20% in Suzuki (Maruti's parent), we would like to see it successful," Henderson told the news agency which noted that New Delhi-based Maruti is 54.2% owned by Suzuki Motor Corp.

"But that doesn't mean we foreclose our desire to do something with the GM and Chevrolet brands," Henderson told Reuters.