SHANGHAI - Watching the crowds swarm into Auto Shanghai '99, it's hard to believe China's market is slipping sideways into another year of stagnation, the fourth in a row.

Despite disappointing growth, many foreign automakers and parts producers remain captivated by the potential Chinese market for their products, sharing the enthusiasm of the crowds.

An estimated 300,000 people pushed through the doors of three different exhibition sites here during the international show's six-day run in June, China's eighth International Automotive & Manufacturing Technology Exhibition. Eagerly awaiting them were some 400 exhibitors from 21 countries with a variety of wares ranging from concept vehicles, fancy cars and massive trucks to high-tech parts and components.

"China is getting the highest-class treatment," says Stefan Jacoby, Volkswagen AG's vice president, Asia/Pacific. "Compared to the last motor show, there has been noticeable progress in technology. Foreign automakers obviously are taking the country more seriously,"

Toyota Motor Corp. displayed its venerable Century luxury sedan, plus a Camry, Lexus LS 400 and sporty new Lexus IS200. But the Japanese automaker's focus these days is on getting government permission for a JV with Tianjin Automotive Corp. to make a Corolla-based car. Toyota's subsidiary, Daihatsu Motor Co. Ltd., already builds minicars in Tianjin. Toyota hopes for approval this year and a production start in 2001.

Ford Motor Co.'s lineup included the P2000 Concept SUV, Puma, Focus, Taurus, Lincoln Town Car, Windstar minivan and Transit commercial van. The latter is made in China in a joint venture with Jiangling Motors Corp.

Hyundai Motor Co. Ltd. showcased an H1 and Galloper van, Sonata and Elantra sedans, an XC luxury sedan and a bright red Coupe. Mitsubishi Motors Corp. spotlighted its HSR VI concept car, flanked by a Lancer and Galant sedan, Space Wagon and two Pajero SUVs.

The car show's glitz and glitter made it difficult to distinguish between imports and domestic models. Foreign makers with a domestic foothold offered a mix of both. Sharing space with Beijing Jeep Corp.'s Super Cherokee and elderly BJ2020 were the Chrysler 300M, Plymouth Neon, Jeep Grand Cherokee, Dodge Grand Caravan, and Plymouth Prowler.

Automobile Citroen SA highlighted its C3 concept car, along with the XM, Xantia, Berlingo, Evasion van and three ZX models. Honda Motor Co. Ltd., now test-marketing Accord sedans assembled in facilities inherited from Peugeot SA in Guangzhou, reports demand stronger than supply and was showing off three Accord models, along with a CR-V SUV and the new S2000 sports car.

Shanghai General Motors Co. Ltd., a joint venture that began producing Buick sedans here in April, reported no fallout in sales from the recent round of anti-American demonstrations in major Chinese cities and pulled out all the stops for the motor show.

On display were a Shanghai Buick CLX, Chevrolet Executive Blazer (which will be built in Jinbei), Cadillac Seville, Opel Vectra CD import from Hungary (that now is being exported to China) and Chevrolet S-10 concept crew cab pickup similar to what's planned for production in China next year.

Making its premiere at the show was a 7-passenger minivan, called the W-Wagon, based on the Opel Sintra and powered by a 3L Buick engine. The vehicle is destined for production in the Buick Shanghai plant next year.

If there was a scene-stealer, the honors probably go to the Qilin, a concept car created by Chinese designers and engineers at the Pan Asia Technical Center, a GM joint venture here. The pert 5-seat, 5-door Qilin, with the potential to become a family, commercial or multi-purpose vehicle, attracted large crowds every day.

Vying for attention were Volkswagen's 3L Lupo, billed as an environmental and technical statement, a New Beetle and a new-generation Passat sedan scheduled for production in China early next year. The three were the stars of VW's 16-vehicle display, which covered roughly twice the area of any competitor, befitting the company's dominant domestic position with two successful JVs and 56% of the Chinese passenger car market.

Today, as in the past, foreign automakers showing their wares in China prefer to emphasize where the Chinese market is going rather than where it is.

Last year, for example, in a country of 1.3 billion people, only 1.62 million vehicles were manufactured, including 507,000 passenger cars.

"The automotive age will be a long time coming in China," says Guy Bouchet, chief representative of management consultants A.T. Kearney in Shanghai.

Yet, car company strategists appear more optimistic, confident it will arrive sooner than later. Says Koji Kadowaki, president of Guangzhou Honda: "What took 20 years to materialize in Japan may take only half as long or less in China."