China aims to be world pacemaker of new-energy auto production

• Source: Xinhua
• [09:16 April 16 2009]
• Comments

April's Auto Shanghai 2009 show highlights the use of energy-saving automobiles, with several well-known auto-makers, including GM and Ford, set to announce new products.

For many Chinese exhibitors this will also be a good platform to show new-energy products. Domestic carmakers including Geely and BYD announced earlier that they would unveil new-energy vehicles, while the country's first hybrid sport utility vehicle (SUV) CS7 is expected to make its debut.

New-energy autos mainly refer to electric vehicles (EV) -- driven by an onboard power generator; hybrid electric vehicles (HEV) -- which combine two or more propulsion system and can save as much as 40 percent of the fuel, and hydrogen or solar energy cars.

These automobiles, which features less reliance on gasoline and diesel, energy-saving and environment protection have attracted many countries worldwide to set foot in research and development in the hope of saving energy.

Industry insiders expect China to become the pacemaker of a new-energy automobile industry in the future thanks to strong policies from the government and a full industrial chain.

On March 20, China unveiled a revitalization plan for the domestic automobile industry, which outlines the details of enlarging new-energy auto production, and developing spare parts and components.

The plan said the country would channel "special funds" from the central budget to encourage use of new-energy autos. Government or companies that purchase the cars are expected to get a compensation of 4,000 yuan (585.6 U.S. dollars) to 25,000 yuan per car.

By 2011, annual production capacity of new-energy autos should stand at 500,000, and 5 percent of new vehicles, including lorries and buses, should be new-energy ones, according to the plan.

Li Chunbo, the CITIC Securities analyst, told Xinhua on Wednesday:" China doesn't occupy a leading position in developing traditional oil-fueled vehicles, but it has great potential in new-energy car production, if it takes advantage of policies."

Pei Pucheng, China's Society of Automobile Engineers praised the measures as a "positive signal" at the same time, saying favorable policies would guide more enterprises to engage in the industry, attract more talents and encourage consumption.

Worsening air conditions and energy shortages have been big risks to China's economic development and environmental protection.