In China, it is set to play a significant role in the future of urban and intercity transport in its congested megacities, said the company.

Volkswagen Group China started the vertical mobility project in 2020, which includes developing the urban air mobility market and the extension of urban traffic into airspace.

Stephan Woellenstein, now the former CEO of Volkswagen Group China, said that this was a pioneering project a young team of Chinese experts started from scratch.

He said: "They are working with new design concepts and materials while developing new safety standards, disrupting and innovating every step of the way.

"The launch of this stunning validation model－the V.MO－is the first of many remarkable milestones on our exciting journey toward urban air travel and a perfect example of our 'From China, For China' mission.

"Our long-term aim is to industrialize this concept and, like a 'Flying Tiger', break new ground in this emerging and fast-evolving new mobility market," he added.

China's electric car startup, Xpeng, is exploring the flying car market as well. Its subsidiary, HT Aero, is scheduled to launch its first model in 2024.

Last week, its first production plant for flying cars opened in Guangzhou, capital of South China's Guangdong province.

Covering 35,000 square meters, it includes two production workshops as well as a testing center.

Volvo-owner Geely was one of the first carmakers to enter the flying vehicle sector. In 2021, it teamed up with German company Volocopter, a specialist in the manufacture of autonomous air vehicles, to establish a joint venture in Chengdu, capital of Southwest China's Sichuan province.

The joint venture will take charge of production and market operations of Volocopter products in the Chinese market.

It plans to help promote urban air mobility in China over the next three to five years. The joint venture also signed orders with Volocopter for 150 aircraft, including logistical unmanned aerial vehicles and manned aircraft.

The emerging flying vehicles sector is now viewed as a serious solution to urban traffic congestion and a new alternative to personal mobility in cities, said global financial services company Morgan Stanley.

It estimates the sector will grow into a market worth $1 trillion by 2040 and $9 trillion by 2050.

Global consultancy Roland Berger estimates there will be up to 160,000 flying vehicles operating as air taxis by 2050.

It said there will primarily be three types of flying vehicles: city taxis with a range of 15-50 km catering to inner-city transportation needs; airport shuttles with the same range to take travelers to and from airports; and intercity jets covering distances of up to 250 km that will provide services between major urban destinations.

Manfred Hader, a Roland Berger senior partner, said: "By 2050, airport shuttles and intercity services together will take the lion's share of the market, achieving about 90 percent of revenue."