RENEE MONTAGNE, host:

Moving now to one place where the car industry is on the rise: China. Three months ago, China overtook the U.S. as the world's top car market. So manufacturers are pulling out all the stops at the Shanghai Auto Show this year. NPR's Louisa Lim's been checking out the action.

(Soundbite of song, "Celebration")

KOOL & THE GANG (Pop Group): (Singing) Celebrate good times, come on.

LOUISA LIM: Visit Shanghai's auto show, and you'd never imagine the industry was in trouble. Celebration is in the air as girls in sequined hot pants twirl around gleaming cars.

Driven by an auto stimulus package, March car sales here hit an all-time record, up 5 percent from a year ago. That's slower than the double-digit growth of the past, but compares favorably to the U.S., where March car sales plummeted 34 percent.

Mr. WOLFGANG DURHEIMER (Porsche Executive Vice President): The world is moving, and the markets are moving.

LIM: Porsche Executive Vice President Wolfgang Durheimer, explaining why the company launched its first four-door model, the Panamera, not in Detroit, not in Tokyo, but here in Shanghai.

Mr. DURHEIMER: China is a booming market for Porsche, and for this reason we decided to launch a new model line in a new environment, and that's why we are here in Shanghai.

LIM: Porsche's sales were up 145 percent here last year. Bentley's soared 50 percent.

At the other end of the market, Ford China executive Nigel Harris admits domestic companies are proving tough competition on price.

Mr. NIGEL HARRIS (Ford China Executive): There's different expectations on price and product, but you get first-time buyers that, like, you know, I guess are coming off motorcycles and bicycles, and so the first vehicle they can afford is maybe a little bit less than what you can buy a Ford for.

LIM: An auto analyst, Michael Dunne from JD Power, says Chinese automakers have upped their game dramatically when it comes to appearances.

Mr. MICHAEL DUNNE (Auto Analyst, JD Power): Today, you have to look hard, and second and third looks to realize oh, that's a Chinese brand right next to Porsche, right next to Mercedes, right next to Toyota.

LIM: One domestic automaker drawing crowds is Geely. It unveiled 22 new models. The crowd pleaser is its concept car, the Ig. This space-age microcar has one Batmobile-like door that opens vertically. It's an electric car with solar-panels to charge the storage battery. It has a single seat in the front, and despite the cutting-edge technology, it's all about price.

Here's Geely's prototyping division director, Wei Xianbo.

Mr. WEI XIANBO (Prototyping Division Director, Geely): (Through translator) This car can either be a left-hand drive or a right-hand drive. The single door keeps the cost down. It should cost about three or $4,000, and it will be our cheapest car. It will go on sale in two or three years.

(Soundbite of TV commercial)

Unidentified Man: BYD your (unintelligible).

LIM: Another attention-grabber is BYD's electric car, the world's first mass market plug-in. Warren Buffett owns 10 percent of this company, which has only six years history in making cars, yet Spokesman Paul Lin makes clear there's no limit to its ambitions.

Mr. PAUL LIN (Spokesman, BYD): Our midterm target is 2015 to become number-one in China market, in 2025 become number-one in the world. Our nuclear weapon is our new energy car.

LIM: Fighting talk, and the Chinese government is throwing its weight behind alternative-energy cars. Its target is to produce half a million hybrid or electric cars within three years.

As Detroit flounders, Beijing is looking to the future.

Louisa Lim, NPR News, Shanghai.

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