The eve of the Shanghai show is a big day for Volkswagen. Tonight we'll get a first look at the all-new Beetle, and tomorrow 'the group' will introduce the Seat brand to the Chinese public. Its hope is that young trendy Chinese consumers will be more convinced by Seat's sporty image than Europeans have been of late.

Before all of that, though, VW laid on a useful backgrounder on the status and development of the Chinese car market.

We get conflicting reports about the size of the pie out here. The truth is that in 2010, China's new car market was worth 11.5 million units, and should be worth about 12.5 million in 2011. That makes it the largest single market in the world, although still not the size of the USA at its height.

Who's market leader? The VW Group; why else would it be so keen to boast to a room full of jet-lagged European hacks? VW has two joint ventures established here via which it builds cars locally: Shanghai VW with SAIC, and FAW. Between the two producers, adding in the cars it imports, VW has a 17.5 per cent share of the national passenger car market. GM China comes next with 10.5 per cent of it.

The biggest single segment of that market is what we'd call the C-segment, made up of Golf-sized saloons and hatchbacks; in China they call it the 'A' segment.

Though they've shown significant growth, imported cars are still relatively small potatoes. The VW Group will sell roughly 65,000 this year, against a backdrop of overall sales of just over two million. And yet China is already the single biggest export market for VW's Phaeton and Touareg, and the second biggest for Scirocco and Beetle.

The really big selling cars here are locally built, but come with a foreign badge on the grille; joint venture cars in other words. Chinese consumers still associate foreign brands with superior quality, and the home grown brands make do with about 30 per cent of the market, concentrated almost entirely at the budget end of the price spectrum.

So how big will this fast-growing market get? 22 million new cars a year by 2020, or so the experts claim. A lot of that growth will come in China's megacities of Shanghai, Beijing and Guangzhou - but just as much will come from the developing wealth being created in small cities. There will be two thousand cities of around a million inhabitants in China by 2020, and 100 million new urban homes within them.

The Chinese car market is growing so fast, in fact, that the roads and the government are struggling to keep up. There are still only 40,000 miles of motorways in China - not much for one of the world's largest countries. In Beijing the growth in car ownership is such that the government is restricting the number of new driving licenses it will grant.

You have to enter a lottery to get a license in China's capital now. I'm guessing that you have to pass a test as well - although to judge by some of the driving you witness, I wonder how tricky it is to pass.