GM China chief Matt Tsien has said that this segment is often ignored by other foreign automakers. The company expects the Chinese market to grow to around 30 million vehicles by 2020, up from 24.6 million last year.

"And it is going to grow beyond that," Mr Tsien said, referring to China's overall auto market. "There will be a point of saturation, but we are probably a decade away."

China’s auto market has recovered from a mixed 2015, when overall sales fell each month from April through to August to register a growth of 14.6 percent in June. Continued sluggishness in gross domestic product (GDP) growth adds unpredictability to the market's near-term outlook.

Sales have stalled in "tier-one" mega-cities such as Beijing and Shanghai but continue unabated in smaller cities and rural areas where drivers favour basic, affordable cars—the kind of low-margin vehicles foreign automakers have largely neglected.

"Tier-one is near saturation," said Mr Tsien. "But when you go into tier-three and -four cities, we saw double-digit growth for the whole of last year. It's still growing at double-digits this year and will continue."

The company believes that it is in a better position than other foreign rivals in these cities because of their investment in no-frills models that began in the early 2000s.