Click here to view article at BusinessWeek.com
By Bloomberg News
April 22 (Bloomberg) -- Huang Jihai considered buying his 28-year-old daughter the world's first plug-in hybrid as a wedding gift in Beijing before choosing to save 16,900 yuan ($2,500) with a gasoline-powered car instead.
“Some of the hybrids and electric cars look pretty cool, but they are too expensive,” said Huang, 51, who opted for a General Motors Co. Cruze. “I'd rather spend less money on a reliable gasoline car.”
Automakers including GM and Nissan Motor Co. plan to display a record 95 alternative energy-powered models at this year's Beijing Auto Show, which opens to the press tomorrow. While China's government has touted less-polluting cars as a way to improve air quality and cut reliance on imported oil, it has delayed a plan to introduce subsidies that may put the models within reach for buyers like Huang.
A lack of affordability may limit sales of such vehicles by GM, Nissan and Toyota Motor Corp., which have all announced plans to introduce new hybrids and electric cars in China by 2011. The sluggish demand is also curbing investment in less- polluting car technology, prompting domestic automakers to seek foreign alliance partners to help fund development.
“It's unrealistic to expect consumers to jump into the technology.” said Bill Russo, a Beijing-based senior adviser at Booz & Co. “You don't have to be too advanced in math to realize that the gas-powered cars are much cheaper and probably deliver more performance and better range.”
Buffett's BYD
BYD Co., a Shenzhen-based carmaker 10 percent owned by Warren Buffett's Berkshire Hathaway Inc., delivered 48 of its F3DM plug-in hybrids in 2009 at 149,800 yuan apiece. By comparison, the company sold 290,963 of the gasoline-powered F3, which starts at 59,800 yuan and was China's best-selling model.
Toyota sold 271 of its 259,800-yuan Prius cars, the world's top-selling hybrid, in China last year, according to the China Association of Automobile Manufacturers. Overall passenger-car sales in the nation totaled 10.3 million.
Local sales of Honda Motor Co.'s Civic hybrid fell 4.9 percent to 193 units last year, making it the least popular Honda-brand model in China, according to Yoshiyuki Kuroda, a company spokesman. The model is imported from Japan, adding a 25 percent tariff to the price tag.
China's Air Pollution
China, the world's second-largest energy user, bought a record 203.8 million metric tons of crude oil last year as 37,383 new vehicles took to the roads every 24 hours. About 44 percent of Chinese cities have an air quality level of 3 or below, according to the State Information Center. China has five levels of air quality, with 1 indicating the cleanest air, 3 meaning “slight” pollution” and 5 representing “heavy” pollution.
“People in these cities can't avoid a life facing serious pollution, and that air quality is not good for their health,” the State Information Center said in the 2010 China Automobile Market Outlook yearbook.
To fight the pollution and reduce oil dependence, the nation aims to have more than 60,000 alternative-energy vehicles on the roads of 10 cities by 2012, Miao Wei, a vice minister at the Ministry of Industry and Information Technology, said last year. Sales of such cars may account for 15 percent of the market by 2020, according to Miao.
Subsidy Delay
The government was previously scheduled to announce subsidies for alternative energy-powered vehicles in January. It is still working on the details after seeking advice from automakers, Xu Ping, chairman of Dongfeng Motor Group Co., said on April 14. The complexity of determining the standards and amount of subsidies caused the delay and the government is now expected to make an announcement in July, China Economic Times reported on April 8.
“I can't wait until the government announces subsidies,” said Huang, who has worked as a driver for the past 30 years.
Separate subsidies for smaller, conventional cars introduced in early 2009 helped Chinese vehicle sales surge 46 percent last year to 13.6 million, surpassing the U.S. to become the world's largest auto market. In Japan, government rebates for buyers of fuel-efficient cars helped make Toyota's Prius the nation's best-selling vehicle model last year.
China's delay in subsidizing hybrids and electric cars has prompted Geely Automobile Holdings Ltd. to put on hold any plans to sell the vehicles, the company's executive director Lawrence Ang said in March. Demand for electric cars is “fairly small,” he said.
Toyota, GM
Other automakers aren't waiting.
Toyota, based in Toyota City, Japan, said April 12 it started offering a hybrid version of its Camry sedan in China and aims to sell 500 units a month. The model, Toyota's fifth hybrid in the country, is priced from 319,800 yuan, compared with 189,800 yuan for the conventional Camry.
GM said April 12 it plans to sell its Volt plug-in car in China next year. The company, based in Detroit, will display its Cadillac Converj electric concept car and the Cadillac XTS concept car with a plug-in hybrid system at the Beijing auto show.
The show will be China's biggest of its kind, with carmakers from across the globe exhibiting a total of 990 models, 89 of them being presented for the first time.
Nissan will display the Leaf electric car, which the Yokohama, Japan-based carmaker plans to start selling in China from 2011 and may eventually build at its plant in Guangzhou. Munich-based Bayerische Motoren Werke AG will debut its new BMW 7 series hybrid sedan and X6 hybrid sport-utility vehicle.
Domestic Carmakers
Most of China's biggest domestic automakers are also planning to mass-market hybrids and electric cars. About 100 electric models have been approved by the country's government for production.
SAIC Motor Corp., the nation's largest carmaker, will debut its E1 electric concept car at the Beijing show and present a hybrid version of the Roewe 750, which will be in mass production this year.
“All the automakers have rushed in, claiming they have their own vehicles powered by alternative energy,” Liu Lixi, an analyst with Northeast Securities Co. in Shanghai, said of the domestic companies. “But the truth is that their technical strength varies a lot.”
China's government and its automakers have invested less than 10 billion yuan in developing alternative energy-powered vehicles since 2006, including 1.1 billion yuan from the government, Miao of the Ministry of Industry and Information Technology said on Jan. 9. By comparison, Nissan alone expects to spend more than 500 billion yen developing electric cars.
Daimler, Volkswagen Partnerships
“It is impossible to realize mass production of alternative-energy vehicles with such little input,” Miao said of the Chinese investment.
Aiming to accelerate development and promotion of the technology, Chinese automakers and the government are teaming up with foreign partners.
BYD and Daimler AG said in March they will jointly develop an electric vehicle to be sold in China, with total investment that may exceed 100 million euros. BYD also signed an electric- vehicle accord with Volkswagen AG in May to explore cooperation on hybrid cars and lithium-battery powered electric vehicles.
Chery Automobile Co., China's largest maker of own-brand cars, is in talks to cooperate with Better Place LLC, a U.S. start-up that's developing charging stations, Julie Mullins, a spokeswoman for Better Place, said on April 6.
Nissan and Renault SA agreed last year to help the Chinese government develop a battery-charging network to promote electric vehicles.
Subsidy Effect
The government subsidies expected to be announced in July may help the carmakers get a return on their investments, according to Chengwu Duan, a Shanghai-based analyst at consulting company IHS Global Insight.
Incentives “will definitely help the sales of electric and hybrid vehicles in China,” Duan said.
Subsidies may help boost total sales of the vehicles to 40,000 in 2010 and 300,000 in 2011, from about 5,000 units last year, he said. Still, low-cost models may benefit more than the more expensive ones currently being sold, Duan said.
The potential for electric cars may still depend on the extent and nature of subsidies, said Takashi Nishibayashi, a Nissan general manager in charge of China operations.
“Without government incentives, our electric-car business won't take off,” Nishibayashi said. “Without knowing the details of the incentives, it's hard to say how much of an impact they will have.”
For More News and Information: Auto statistics: {ATSL} Auto-show coverage worldwide: {TNI AUT SHOW } Top transport stories: {TRNT } Most-read stories on alternative energy: {MNI ALTNRG 1W }
--Tian Ying, Makiko Kitamura. Editors: Terje Langeland, Kae Inoue
By Bloomberg News
April 22 (Bloomberg) -- Huang Jihai considered buying his 28-year-old daughter the world's first plug-in hybrid as a wedding gift in Beijing before choosing to save 16,900 yuan ($2,500) with a gasoline-powered car instead.
“Some of the hybrids and electric cars look pretty cool, but they are too expensive,” said Huang, 51, who opted for a General Motors Co. Cruze. “I'd rather spend less money on a reliable gasoline car.”
Automakers including GM and Nissan Motor Co. plan to display a record 95 alternative energy-powered models at this year's Beijing Auto Show, which opens to the press tomorrow. While China's government has touted less-polluting cars as a way to improve air quality and cut reliance on imported oil, it has delayed a plan to introduce subsidies that may put the models within reach for buyers like Huang.
A lack of affordability may limit sales of such vehicles by GM, Nissan and Toyota Motor Corp., which have all announced plans to introduce new hybrids and electric cars in China by 2011. The sluggish demand is also curbing investment in less- polluting car technology, prompting domestic automakers to seek foreign alliance partners to help fund development.
“It's unrealistic to expect consumers to jump into the technology.” said Bill Russo, a Beijing-based senior adviser at Booz & Co. “You don't have to be too advanced in math to realize that the gas-powered cars are much cheaper and probably deliver more performance and better range.”
Buffett's BYD
BYD Co., a Shenzhen-based carmaker 10 percent owned by Warren Buffett's Berkshire Hathaway Inc., delivered 48 of its F3DM plug-in hybrids in 2009 at 149,800 yuan apiece. By comparison, the company sold 290,963 of the gasoline-powered F3, which starts at 59,800 yuan and was China's best-selling model.
Toyota sold 271 of its 259,800-yuan Prius cars, the world's top-selling hybrid, in China last year, according to the China Association of Automobile Manufacturers. Overall passenger-car sales in the nation totaled 10.3 million.
Local sales of Honda Motor Co.'s Civic hybrid fell 4.9 percent to 193 units last year, making it the least popular Honda-brand model in China, according to Yoshiyuki Kuroda, a company spokesman. The model is imported from Japan, adding a 25 percent tariff to the price tag.
China's Air Pollution
China, the world's second-largest energy user, bought a record 203.8 million metric tons of crude oil last year as 37,383 new vehicles took to the roads every 24 hours. About 44 percent of Chinese cities have an air quality level of 3 or below, according to the State Information Center. China has five levels of air quality, with 1 indicating the cleanest air, 3 meaning “slight” pollution” and 5 representing “heavy” pollution.
“People in these cities can't avoid a life facing serious pollution, and that air quality is not good for their health,” the State Information Center said in the 2010 China Automobile Market Outlook yearbook.
To fight the pollution and reduce oil dependence, the nation aims to have more than 60,000 alternative-energy vehicles on the roads of 10 cities by 2012, Miao Wei, a vice minister at the Ministry of Industry and Information Technology, said last year. Sales of such cars may account for 15 percent of the market by 2020, according to Miao.
Subsidy Delay
The government was previously scheduled to announce subsidies for alternative energy-powered vehicles in January. It is still working on the details after seeking advice from automakers, Xu Ping, chairman of Dongfeng Motor Group Co., said on April 14. The complexity of determining the standards and amount of subsidies caused the delay and the government is now expected to make an announcement in July, China Economic Times reported on April 8.
“I can't wait until the government announces subsidies,” said Huang, who has worked as a driver for the past 30 years.
Separate subsidies for smaller, conventional cars introduced in early 2009 helped Chinese vehicle sales surge 46 percent last year to 13.6 million, surpassing the U.S. to become the world's largest auto market. In Japan, government rebates for buyers of fuel-efficient cars helped make Toyota's Prius the nation's best-selling vehicle model last year.
China's delay in subsidizing hybrids and electric cars has prompted Geely Automobile Holdings Ltd. to put on hold any plans to sell the vehicles, the company's executive director Lawrence Ang said in March. Demand for electric cars is “fairly small,” he said.
Toyota, GM
Other automakers aren't waiting.
Toyota, based in Toyota City, Japan, said April 12 it started offering a hybrid version of its Camry sedan in China and aims to sell 500 units a month. The model, Toyota's fifth hybrid in the country, is priced from 319,800 yuan, compared with 189,800 yuan for the conventional Camry.
GM said April 12 it plans to sell its Volt plug-in car in China next year. The company, based in Detroit, will display its Cadillac Converj electric concept car and the Cadillac XTS concept car with a plug-in hybrid system at the Beijing auto show.
The show will be China's biggest of its kind, with carmakers from across the globe exhibiting a total of 990 models, 89 of them being presented for the first time.
Nissan will display the Leaf electric car, which the Yokohama, Japan-based carmaker plans to start selling in China from 2011 and may eventually build at its plant in Guangzhou. Munich-based Bayerische Motoren Werke AG will debut its new BMW 7 series hybrid sedan and X6 hybrid sport-utility vehicle.
Domestic Carmakers
Most of China's biggest domestic automakers are also planning to mass-market hybrids and electric cars. About 100 electric models have been approved by the country's government for production.
SAIC Motor Corp., the nation's largest carmaker, will debut its E1 electric concept car at the Beijing show and present a hybrid version of the Roewe 750, which will be in mass production this year.
“All the automakers have rushed in, claiming they have their own vehicles powered by alternative energy,” Liu Lixi, an analyst with Northeast Securities Co. in Shanghai, said of the domestic companies. “But the truth is that their technical strength varies a lot.”
China's government and its automakers have invested less than 10 billion yuan in developing alternative energy-powered vehicles since 2006, including 1.1 billion yuan from the government, Miao of the Ministry of Industry and Information Technology said on Jan. 9. By comparison, Nissan alone expects to spend more than 500 billion yen developing electric cars.
Daimler, Volkswagen Partnerships
“It is impossible to realize mass production of alternative-energy vehicles with such little input,” Miao said of the Chinese investment.
Aiming to accelerate development and promotion of the technology, Chinese automakers and the government are teaming up with foreign partners.
BYD and Daimler AG said in March they will jointly develop an electric vehicle to be sold in China, with total investment that may exceed 100 million euros. BYD also signed an electric- vehicle accord with Volkswagen AG in May to explore cooperation on hybrid cars and lithium-battery powered electric vehicles.
Chery Automobile Co., China's largest maker of own-brand cars, is in talks to cooperate with Better Place LLC, a U.S. start-up that's developing charging stations, Julie Mullins, a spokeswoman for Better Place, said on April 6.
Nissan and Renault SA agreed last year to help the Chinese government develop a battery-charging network to promote electric vehicles.
Subsidy Effect
The government subsidies expected to be announced in July may help the carmakers get a return on their investments, according to Chengwu Duan, a Shanghai-based analyst at consulting company IHS Global Insight.
Incentives “will definitely help the sales of electric and hybrid vehicles in China,” Duan said.
Subsidies may help boost total sales of the vehicles to 40,000 in 2010 and 300,000 in 2011, from about 5,000 units last year, he said. Still, low-cost models may benefit more than the more expensive ones currently being sold, Duan said.
The potential for electric cars may still depend on the extent and nature of subsidies, said Takashi Nishibayashi, a Nissan general manager in charge of China operations.
“Without government incentives, our electric-car business won't take off,” Nishibayashi said. “Without knowing the details of the incentives, it's hard to say how much of an impact they will have.”
For More News and Information: Auto statistics: {ATSL
--Tian Ying, Makiko Kitamura. Editors: Terje Langeland, Kae Inoue
No comments:
Post a Comment