GM Looks to China for Cleaner Cars

Will launch $250 million alternative fuel research center in Shanghai

As it looks to dramatically ramp up production of more environmentally friendly cars, General Motors said Oct. 29 it would launch a $250 million alternative fuel research center in China. The new center in Shanghai, which will conduct research into fuels and vehicles, will be launched in conjunction with the firm's Shanghai auto partner, SAIC, General Motors chief executive Rick Wagoner said.

GM also announced that it would begin selling a hybrid vehicle model in China next year using locally made engines. "GM is proud to be announcing one of the most important and far-reaching collaborative strategies to promote energy efficiency and environmentally friendly transportation in China and around the world," Wagoner said.

GM expects hybrid and biofuel vehicles will comprise around 10% of its worldwide production of 9.2 to 9.4 million units this year. "(But) if you look out five years or so, I think that number is going to be significantly higher. It could be 50% of global production," Wagoner said.

The first phase of construction of the Shanghai center, which will also include the Chinese government as a partner, will be completed next year. It will focus on developing bio and other alternative fuels, and the engines for them, Wagoner said.

An additional agreement with SAIC and Beijing's Tsinghua University will establish a five-million-dollar clean fuel research laboratory in the Chinese capital. "The center is responsible for reducing China's dependence on petroleum based fuels," Wagoner said. "China has the potential to become the market leader in the adoption of alternative propulsion systems."

China's auto industry, a key component of its booming economy, has come scrutiny with climate change and pollution in the global spotlight. A recent report from the State Environmental Protection Administration said car fumes caused 79% of air contamination in China's highly polluted cities on bad days.

Auto sales in China, the globe's second largest car market after the U.S., soared in the first nine months of the year to 4.58 million units, a 24% increase from a year ago, according to Chinese state media. General Motors expects to sell more than one million vehicles in China for the first time this year, compared with 876,747 units in 2006.

For his part, SAIC chairman Chen Hong said his company planned to produce 10,000 hybrid fuel vehicles a year by 2010, as it raises its commitment to find cleaner ways to power vehicles.

Copyright Agence France-Presse, 2007

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