March 3, 2010 / 10:29 AM / in 7 years

UPDATE 1-China's Geely researching new energy cars

3 Min Read

* Chairman says firm looking into new energy cars

* Products will not be ready within next 1-2 years (Adds quotes, background)

By Sui-Lee Wee

BEIJING, March 3 (Reuters) - China's Geely Automobile Holdings (0175.HK) is researching new energy cars, joining its rivals in developing clean tech vehicles as Beijing gets ready to roll out incentives to promote such technology.

But such development is still in the relatively early stages, with no new products expected within the next one to two years, Geely Chairman Li Shufu said on Wednesday.

Geely's potential foray into new energy cars comes as other Chinese auto companies such as BYD Co Ltd (1211.HK) and Beijing Automotive Industry Holding Corp (BAIC) are pumping money into developing similar cars, aiming to cash in on state incentives and the nation's push for renewable energy.

"Every company in the auto industry is looking at it right now," Li told reporters on the sidelines of the opening of the Chinese People's Political Consultative Conference in Beijing.

"But this needs time and people need patience. It can't be done within the next one to two years," he added.

BYD plans to start selling its first electric car, the e6, in the first quarter of 2010, Paul Lin, manager of the company's marketing department said in late December. [ID:nTOE5BT05H]

Li said the business potential of new energy cars would be better if oil prices continue to rise.

His comments come on the back of Beijing's rejection of heavy machinery maker Tengzhong's bid to buy GM's [GM.UL] money-losing Hummer brand. Analysts say that deal failed to win regulatory approval in part because it did not gel with China's agenda of curbing pollution. [ID:nTOE61O065].

Separately, Li said Geely's car sales look good so far this year.

Geely's parent, Zhejiang Geely Holding Group, China's largest non-state auto firm, is bidding for Ford Motor Co's (F.N) Volvo unit. Li declined to comment on the status of that deal, but said the company has no plans for more acquisitions in the near term.

The chief executive of Ford (F.N) unit Volvo Car dismissed concerns on Tuesday that the recent failure of Tengzhong to purchase the Hummer brand from GM could derail its sale to Zhejiang Geely. [ID:nWEB3421]. (Editing by Doug Young and Jacqueline Wong)

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