As car makers from around the world gather to show off their latest products at the Shanghai auto show, there is talk of China's premium car market hitting 3 million in just five years’ time – a big rise on current sales of 1.3m.

Bob Grace, Jaguar Land Rover’s China president, suggested the figure at the Shanghai event, which could mean big profits for the UK-based, Indian-owned firm.

122,000 JLR vehicles were sold in China last year, representing a rise of 28 per cent.

Grace said: “We don’t expect to see the same percentage levels as the volume gets bigger. But whatever happens [with GDP growth] JLR will beat the market.”

There's no doubt that the Chinese premium car market holds huge opportunities for international carmakers. But there is concern over the country’s growth. While the current 7.4 per cent annual growth rate would delight most European governments, in China it is less impressive: growth has not been this low since 1990.

And in terms of car sales, the annual sales increase rate of 6.9 per cent is only half that of the year before.

Some among the green lobby may be glad to see the prospect of demand for cars in China dropping off. When the world’s most populous country takes to the road, it could mean big problems for the environment; Chinese cities already suffer from serious smog problems due to heavy traffic.

But the fact that European and American cars are increasingly popular could spell good news for the environment. Western vehicles are already built to meet strict environmental standards - which means less petrol consumption and lower petrol costs to the consumer.

Whether Chinese buyers care much about petrol costs is not clear. But with a population of 1.4bn and growing, the chances are they will one day.