| SHANGHAI, April 20
SHANGHAI, April 20 China is warming to
gasoline-electric hybrid cars as it tackles an addiction to
fossil fuels, and local car makers are finally heeding the call
and entering a niche 'green' market dominated by Japanese rivals
such as Toyota Motor Corp.
Some automakers like state-owned SAIC Motor Corp
and Brilliance Auto are developing the fuel-saving
technology pioneered by Toyota on its Prius model two decades
ago, and BYD Co , a Chinese battery and
automaker part-owned by a Warren Buffett company, will unveil a
"self-developed" gasoline-electric car technology at the
Shanghai auto show, the premier industry event in the world's
biggest market, later on Saturday.
Throwing more subsidies at conventional hybrids could help
kick-start China's so-called 'new-energy' car policy, which has
failed to gain traction. The policy aims to put half a million
new-energy vehicles - defined as all-electric battery vehicles
and heavily electrified "near all-electric" plug-in hybrids - on
the road by 2015 and 5 million by 2020.
Last year, just 12,791 such vehicles were sold, according to
the China Association of Automobile Manufacturers data, and
industry experts reckon China has little hope of hitting those
objectives unless the government redefines new-energy cars and
embraces conventional hybrids and other alternative energy
"After all these years, people now realise that all-electric
battery cars are unlikely to become mainstream over the next 10
years," said Peter Huang, associate director at IHS Automotive.
Looking to wean China off fossil fuels and clean up its
polluted air, Beijing has offered generous purchase incentives
on new-energy cars in a 3-year programme that ended last year.
As it comes to renew the programme, which industry insiders
expect in the coming weeks, the government is thought likely to
increase subsidies for hybrids.
Handouts for those buying hybrid cars "will likely be
significantly higher" than they are now, a senior executive at a
major state-owned automaker told Reuters. In the previous
programme, Beijing offered a 3,000 yuan ($490) rebate to drivers
buying a new gas-electric hybrid car, way below the 60,000 yuan
handouts on all-electric battery cars.
"The government has to change the policy. What has happened
is they can't spend the money budgeted for all-electric cars
because few people are buying them. People are not motivated to
buy hybrids either as the subsidies are far from enough," said
the state-owned auto company executive, who didn't want to be
named because of the sensitive nature of the matter.
Jochem Heizmann, CEO of Volkswagen Group China,
said "There's a discrepancy between the (Chinese) government's
goals and actions. Over the next 10 years, plug-in hybrids have
much better prospects to achieve a certain volume than (purely)
"The problem is that special infrastructure has to be
organised in some public areas. For private individuals it's
really difficult to use the electric car. It will take a long
time to get to a certain volume (with battery-powered cars)," he
told reporters in Shanghai on Friday.
"ALL VERY COMPLICATED"
Chinese media have reported that Miao Wei, head of the
Ministry of Industry and Information Technology, told delegates
at last month's National People's Congress that the new-energy
car rebate programme would likely include 16 categories based on
a vehicle's fuel efficiency - raising industry hopes that the
government is ready to boost subsidies for conventional hybrids.
"China's hybrid vehicles have been gradually maturing and
mainstream products have achieved 20 percent savings on fuel.
Conventional hybrids are thus ready, and cleared the threshold
for country-wide promotion," state media reported Miao as saying
at a Congress session.
Some media said other ministries had not yet been won over
to the merits of adopting conventional hybrids aggressively.
"I haven't heard anything definite, it's all very
complicated," said an official at the semi-government China
Automotive Technology & Research Center (CATARC), a body that
helps set vehicle standards and technical regulations, as well
as product certification and industry planning.
The city of Guangzhou, a key industrial hub in southern
China with a population of 12.7 million, decided last year to
offer a 10,000 yuan rebate to anyone buying a gas-electric
The application of hybrid technology - propelling a vehicle
by coupling a gasoline engine with an electric motor - began
with Toyota in the 1990s, and has since been taken up by many
automakers. Hybrids are particularly popular in the United
States and Japan. Toyota alone has sold more than 5 million
hybrids since launching the Prius in 1997.
Among China's leading carmakers, SAIC has said it will
launch the Roewe 550 hybrid in the coming months, adding to its
Roewe 750 hybrid which hit showrooms in 2011 and which is priced
from 236,800 yuan. Brilliance Auto is set to mass produce its
FSV, a so-called 'mild hybrid' car that uses stop-start
technology - where the gasoline engine stops when the car is at
a standstill and re-starts when the driver steps on the gas
pedal. To date it has sold several hundred FSVs to fleet
operators in Dalian and other cities. Great Wall Motor Co
is also expected to put its first 'green' car, a
cross-over hybrid, on the market in China next year.
"We have been focusing mostly on hybrids because battery
technology is not mature and the cost is too high," said Judy
Zhu, a spokeswoman for SAIC.
Whatever Beijing decides on incentives for conventional
hybrids, non-Chinese manufacturers will benefit, too.
Toyota last year more than quadrupled sales of its hybrids
in China to around 17,000 cars, some made locally and others
brought in from Japan. Beyond the Prius, Toyota has a hybrid
Camry that it builds in China. Volume sales are relatively low
as the hybrids are pricey, with the Prius, for example, starting
at $37,200 due to high taxes on imported cars in China. To bring
prices down, Toyota plans to produce key hybrid parts such as
the electric motors and batteries in China by 2015.
Japanese rival Honda Motor Co sold only 540 hybrid
cars in China last year, but plans to start producing certain
hybrid models in China as early as next year.