The Guangzhou auto show which opens Tuesday, is one of the most closely watched events in Asia - insiders say it's a barometer of the car market in the coming year. This year’s theme is Green Technology and Sustainable Development. After a slow year in 2011, participants are optimistic about the year to come.

New energy vehicles is one of 7 strategic emerging industries under China’s 12th 5 year plan. They are also the centre of attention at this year’s show.

German car manufacturers such as Audi, Mercedes and BMW showed off their latest green technologies. Audi is showcasing light weight bodies, highly efficient engines and energy saving lights. BMW’s 4 cylinder engine will use the X1 model, which is more gas efficient. And this smart car from Mercedes is geared towards the Chinese market. Japanese carmaker Toyota also brought its gas saving models. The new 4 cylinder Camry only requires 7.8 litres of gas per 100 kilometres, down from 10.3 litres.

Feng Xingya, Deputy CEO of Guangzhou Toyota M.C. said "In terms of energy consumption, around 87 percent of energy is wasted on the rotation systems of the engine. The other 13 percent cannot be used efficiently either. Therefore, there is a lot of potential to save energy by using high technologies. Light weight and small vehicles are the future trend."

Many joint ventures are coming up with their own models, and showcasing them at the Guangzhou auto show. The latest JV between Changan and PSA Peugeot Citroen has produced an East-meets-West model.

Xu Liuping, CEO of Changan Auto said "The model combines Chinese and European design. Its different from traditional joint ventures in China. In addition to diesel cars, we have new energy vehicles. It helps us to stay competitive. "

The Guangzhou auto show is one of Asia’s biggest and most closely watched. Nearly 1000 vehicles are exhibited at the show - about 30 on display for the first time ever. This year, more than 50 are new energy vehicles.