With Chinese growing wealthier and often restricted to one vehicle purchase in major cities, SUVs have been a rare bright spot for an auto market sapped by the country's slowest economic growth in decades. In the year through October, sales surged 46 percent year-on-year in a broader market that grew 1.5 percent.

Carmakers have chased the rainbow with some 32 new SUV models expected in China for 2015, according to Automotive Foresight, including some being showcased at the Guangzhou auto show that opened on Friday. But with competition already squeezing prices, and sales growth seen weaker next year as demand becomes saturated, cashing in on SUVs may prove elusive.

"The good old days will pass, when you could just launch any model and you could have pretty good sales," said Yale Zhang, head of Shanghai-based consultancy Automotive Foresight.

Carmakers are undeterred for now. At the Guangzhou show, Weiming Soh, Volkswagen AG (>> Volkswagen AG) Vice President for Sales and Marketing, said the German auto maker will launch six new locally made models in China's SUV market in the next three to four years.

Even as firms like Ford Motor Co (>> Ford Motor Company) and Chongqing Changan Automobile Co <000625.SS> present new SUVs at Guangzhou - the Everest and the CS15 respectively - official data shows prices are falling.

Prices dropped 3.4 percent in the first nine months of this year, outpacing the 1.2 percent decline for passenger vehicles overall, according to the National Reform and Development Commission, China's top planning body.

Meanwhile sales growth is expected to slip to 11 percent next year, according to IHS Automotive.

"SUVs, I think, in the future won't continue to increase rapidly like now." said Zhu Huarong, president of Chongqing Changan Automobile, speaking at the Guangzhou show. "It will return to a rational, normal growth."

That reflects an ever-higher base of sales and the market growing more saturated, yet opportunities remain for SUVs that fill market gaps, Automotive Foresight's Zhang said. While SUVs in China now skew towards small models built on sedan frames, Ford's Everest and Great Wall Motor Co's (>> Great Wall Motor Co Ltd) Haval H7 will meet niche demand for larger SUVs, for example.

Market fragmentation also means top selling models are no longer being bought in the same profit-boosting volumes: China's top 10 best-selling SUVs only accounted for 34 percent of the market as of September, compared to 64 percent in 2010.

New SUVs will have a tougher time commanding fat profit margins they may have enjoyed in recent years, analysts at Fitch Ratings wrote in a note last week.

"The risks of model failure will also increase, so that some unpopular SUV models could become loss-making due to a lack of economies of scale and low capacity utilisation," Fitch's analysts wrote.

(Editing by Kenneth Maxwell)

By Jake Spring