The agreement was part of the German company's plan to invest 9.8 billion euros ($13.4 billion) in China by 2015, the largest investment plan in the world's biggest vehicle market.

Martin Winterkorn, chairman of VW's board, said that the company plans to establish seven new plants in China in the coming years. Those plants will help boost its local annual production capacity by more than 60 percent to 4 million units by 2018, when it aims to be the world's largest maker of vehicles.

Supported by strong demand for all of their major brands, GM and its joint ventures reported sales of a record 3.16 million vehicles in China in 2013. That was a gain of 11.4 percent, but it fell below the industry's 13.9 percent growth. The US company sold an average of one vehicle every 10 seconds and almost 9,000 each day in China.

"General Motors maintained good growth momentum in our company's largest market, despite a modest slowdown in demand for commercial vehicles," said Matt Tsien, president of General Motors China.

"We benefited from a broad portfolio of models and brands that are meeting the diverse needs of vehicle buyers across China."

Tsien spoke with China Daily at the North American International Auto Show, which runs from Jan 13 to 26 in Detroit. He said that "the position of No 1 or No 2 is not our focus right now. We are paying attention to offering more advanced products that perfectly meet the market and consumer requirements in China".

Tsien forecast an 8 to 10 percent annual increase in China's vehicle market in 2014, with GM's sales growth likely to be similar or a bit higher.

During the year, GM will launch 17 new or upgraded models to attract Chinese consumers.

"Some of them will help General Motors enter new segments," said Tsien.

He also said that the company sees great potential in the luxury vehicle sector, where its Cadillac cars are still competing for brand awareness as latecomers to the market.

He said GM is also eyeing China's booming sport utility vehicle segment, which accounted for more than 20 percent of total passenger vehicle sales in 2013.