Global automakers competing for environment-friendly vehicle market in China

Global automakers are rushing to manufacture environment-friendly vehicles in China, the world’s biggest automotive market. General Motors Company and Shanghai Automotive Industry Corp. have agreed to jointly develop an electric vehicle. Germany’s Volkswagen AG has tied up with the FAW Group and the two companies plan to launch an electric vehicle under a Chinese brand in 2013. Not to be outdone, Japanese automaker Nissan Motor Co., in a joint venture with Dongfeng Motor Corp., announced plans to produce an electric vehicle in China under the joint venture’s Venucia brand. The Chinese government is offering subsidies to made-in-China electric vehicles, in a bid to encourage foreign automakers to manufacture green vehicles in the country, although some analysts say electric vehicles are not likely to become widespread in China in the near future because of the limited driving ranges, long battery-charging times and lack of related infrastructure. More industry officials are now favoring hybrid vehicles, especially plug-in hybrids, to serve as transitional green vehicles. In view of this, Honda Motor Co. said it plans to release five new hybrid models next year in China. Local production will start within a few years. Toyota Motor Corp. is also bent on manufacturing the third generation model of its Prius hybrid in China. The high cost of hybrids has been prohibitive, so to cut costs, Honda and Toyota plan to manufacture motors and other core parts in the country. (October 31, 2011)