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CAR TECH
China consumers slow to convert to cleaner cars
by Staff Writers
Beijing (AFP) April 23, 2012


Carmakers at the Beijing auto show are due to unveil scores of clean energy vehicles as they try to convince Chinese customers to swap gas-guzzling SUVs for cleaner but slower and pricier options.

But analysts say the rush to showcase green technology at the Auto China 2012 exhibition, which opens Monday, is unlikely to hide the fact it may still take a long time for the Asian nation to fully embrace an electric future.

The show will see the worldwide launch of 120 new models from domestic and international brands, and will include dozens of concept cars and new energy vehicles, organisers say.

Toyota, BMW, Honda and China's Warren Buffett-backed BYD have all announced they will unveil electric or hybrid cars as part of a total of 88 new energy vehicles to be displayed at the show, which ends on May 2.

"International car makers are all trying to appease the government by showing they are indeed bringing electric vehicles to China," said Namrita Chow, an analyst at research firm IHS Global Insight.

"Almost every international automaker has announced plans for electric vehicles in China. But almost all are equally as sceptical of volume sales."

China -- keen to shift from its high dependence on oil -- has pledged to invest more than $14 billion to develop the technology and infrastructure for clean energy cars in a bid to have more than 5 million on the road by 2020.

The government also hopes that by promoting its own, homegrown technology, it will manage to get a step ahead of foreign auto firms, many of which have more than 100 years of experience in traditional car-making behind them.

As a result, Beijing has put pressure on foreign car makers to invest in the clean energy field in cooperation with their Chinese joint-venture partners, and is pushing for more transfer of technology.

The government has also launched pilot schemes around the country to try and promote the use of electric or hybrid cars and has invested large amounts of money in research and development.

In the southern city of Shenzhen, for example, authorities subsidise half the purchase of a clean energy vehicle, and Beijing has invested as much as $54 million to develop electric batteries over the past ten years.

But despite this, sales have been disappointing.

So far, only around 10,000 to 20,000 privately-owned clean energy cars have hit the roads, according to consultants McKinsey.

And despite the anticipated green blitz at the Beijing auto show, car makers remain cautious as to when they will actually be able to mass produce in China.

Volkswagen, which has announced plans to make electric vehicles in China as soon as next year, has admitted it will probably only have managed to sell a substantial amount by 2018.

By then, it aims to have sold 10,000 such vehicles in the Asian nation -- still a far cry from the number of traditional cars the German firm sells every year. In 2011, for instance, 2.6 million of its vehicles were bought in China.

"It's all about showing commitment," said Axel Krieger, a Beijing-based partner with McKinsey.

"It does not make sense from a business perspective for foreign carmakers to transfer technology and mass produce when we still don't know what the market will look like looking forward."

Analysts say auto manufacturers have expressed frustration at the slow rate at which the market is developing in China. So far, very few clean energy models are actually on sale.

"The cost of the vehicle remains high and the technology does not allow a competitive offer versus a traditional car," said Yann Lacroix, an analyst with Euler Hermes.

General Motors has priced its hybrid Chevrolet Volt at 498,000 yuan. By way of comparison, its slightly bigger Chevrolet Malibu costs between 162,900 yuan and 229,900 yuan in China.

"Auto makers are also coming up against technology hurdles and the fact that infrastructure has not been keeping up", said Jean-Philippe Millerioux, who is in charge of new energy vehicles for Peugeot Citroen in Shanghai.

Overall, analysts say the market is not expected to take off until at least 2020, when the price of electric vehicles will fall in line with that of traditional cars.

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Global carmakers gather for China auto show
Beijing (AFP) April 23, 2012 - Major carmakers gathered in Beijing on Monday for China's leading auto show, seeking an edge in the world's largest automobile market after a sharp slowdown in growth.

The Auto China 2012 exhibition will run until May 2 and see the worldwide launch of 120 new models, 36 of them from international brands, according to organisers.

The exhibition will also showcase dozens of concept cars and new energy vehicles with Toyota, BMW, Honda and China's Warren Buffett-backed BYD all planning to unveil electric or hybrid cars in the Chinese capital.

China -- keen to shift from its high dependence on oil -- has pledged to invest more than $14 billion to develop the technology and infrastructure for clean energy cars in a bid to have more than 5 million on the road by 2020.

But analysts say it may still take a long time for the Asian nation to fully embrace an electric future.

China's car sector stalled last year following record growth in 2009 and 2010 that saw it emerge as the world's top car market.

The slowdown came after the government rolled back auto-purchase incentives and some cities imposed tough driving restrictions to ease traffic congestion and pollution.

Nonetheless, many major multinational carmakers remain keen to boost their production, confident of continued steady growth in the Asian nation.

Foreign brands still dominate the Chinese market, but the government is trying to shift the balance by seeking to further cement cooperation between foreign carmakers and their Chinese partners.

Foreign carmakers have long been required to set up operations in joint ventures with Chinese companies.

The government is now pushing such ventures to create more local brands specifically for China's market, and earlier this year, Beijing said it was withdrawing some support for foreign investment in the sector.



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CAR TECH
Honda to provide hybrid technologies to China firms: report
Tokyo (AFP) April 22, 2012
Honda Motor will provide its core hybrid car technologies to a number of Chinese automakers, eyeing to boost sales in the world's largest car market, a report said Sunday. As Honda's sales in China have long been sluggish, it aims to achieve a turnaround by aggressively pushing its hybrid vehicle technologies, the Japanese business daily Nikkei reported. "We hope that other automakers wi ... read more


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