Passenger car output in China rose last month (June) by 83 per cent on the same time a year earlier, the Chinese State Statistical Bureau has announced.

The burgeoning Chinese economy and previously restrained demand are responsible for the rise, which makes the 2 million production target feasible this year.

Producers Volkswagen and General Motors both intend to up production, although there are fears in some quarters that supply could outstrip demand and negate much of the potential for increased profits.

Over the first half of this year, output nearly reached the total figure for 2002 - 903,400 units compared to 1.06 million.

The 179,200 vehicles assembled in June this year also represent a thirteen per cent improvement on May's production levels.

China is unrivalled in the current growth capacity of its automotive market, which is offsetting some of the woes caused by the slump in demand in the world's biggest market, America.

'The rate of growth in May will mark the year's low point', the statistics bureau said. 'Production in April and May, which had been depressed by SARS, has basically turned around.

'The rise in car [output] has obviously exceeded that of other vehicles to become the main engine of vehicle growth.'