By Duncan Bartlett BBC World Service business reporter

Take a drive through London, Los Angeles or Lagos and many of the cars you'll see will be Japanese.

Firms such as Toyota, Honda and Nissan have been hugely successful in cracking foreign markets.

But now Japanese automotive giants are focussing their attention on China, where the car market is growing at a phenomenal rate.

Nissan's French chief executive Carlos Ghosn has identified China as his firm's number one geographical priority in terms of market development.

Top buyer

China currently only accounts for 1% of Nissan's global sales.

Will China start exporting cars?

But it's the potential for growth which excites Mr Ghosn and other executives.

Analysts believe that by 2010 the Chinese will buy five million vehicles annually.

That will make China the third biggest market for new cars in the world, after America and Japan.

Hidden costs

Not that it's an easy market to crack.

The government imposes heavy tariffs on imported cars, and encourages manufacturers to make vehicles locally for the Chinese market.

There's plenty of cheap labour in China. Wages there are about a tenth of those in Japan.

That presents a potential problem for the Japanese economy, Hiroshi Okuda chairman of Toyota said.

"When I look around Japan, particularly at assembly industries, many of them... have shifted operations to China," he said.

"As a result the number of employees Japanese firms employ in China will increase and the number they employ in Japan will decrease."

"In Japan at the moment unemployment's running at 5.4% and that may be, to a large extent, a result of this."

Converging standards

All the cars built in China itself are for Chinese customers alone.

But the chairman of the Japan Automobile Importers Association Keisuke Egashira believes it won't be long before they start arriving abroad.

"At the moment the requirement of quality in the Japanese market is very high, very sophisticated so the cars manufactured in China, for the time being, will not satisfy Japanese customers yet, but it's a matter of a few years before they will start coming in," he said.

China's already the leading exporter of electronics, textiles and light machinery into Japan.

Costs are low, and the country's reputation for efficiency and quality is improving all the time.

And China's also aware of a large and lucrative car market, right on its own Asian doorstep.