Guangzhou Auto targets hybrid cars

PUBLISHED : Friday, 18 January, 2008, 12:00am
UPDATED : Friday, 18 January, 2008, 12:00am

Guangzhou Automotive Industry Corp expects to become the first mainland car company to produce its own brand of hybrid car, which it aims to launch on the domestic market next year.

Company president Zhang Fangyou said on the sidelines of the Guangdong People's Congress yesterday the carmaker was working with its joint-venture partners Toyota and Honda on a self-branded environmentally friendly car.

He did not disclose how much the company would invest or what the production capacity would be for the hybrid, which would be powered by a battery and a petrol engine.

Huang Huahua, the governor of Guangdong province, said in a report yesterday that Guangzhou Automotive, the country's sixth-largest carmaker, would become the car industry leader in southern China by pushing the development of its own brand of vehicles in the Pearl River Delta.

The company said in November it invested 6.8 billion yuan to build a research and development centre in Panyu that would develop Guangzhou Automotive's own-brand cars.

Mr Zhang said earlier that the company would first focus on the domestic market.

'Sales to overseas markets will be the second step after the company achieves stable growth,' he said.

This is the second time Guangzhou Automotive has co-operated with its joint-venture partners to build a car brand of its own.

The company said in July it was working with Honda to make a Guangzhou brand car, though it provided no details. Together they invested two billion yuan in a research and development centre, and expected to launch models in 2010.

Another carmaker, Chongqing-based Changan Automobile, said last month it would display its own hybrid car during this year's Beijing Olympics, but it did not disclose its production capacity or sales target.

Analysts see the move as largely a marketing strategy because they do not believe Changan Automobile will be able to achieve large-scale production fast enough.

Mainland carmakers are working on building green cars to comply with Beijing's policy of reducing air pollution.

Vice-minister of the National Development and Reform Commission Zhang Guobao said in September Beijing hoped to meet the international Euro IV emission standards as soon as it could.

The central government had been pushing clean diesel engines with low sulphur and carbon monoxide emissions but shifted its stance and encouraged carmakers to build other types of green cars, such as hybrids.

The country's largest carmaker, SAIC Motor Corp, which is likely to announce a tripling of earnings, has poured two billion yuan into building a research and development centre in Shanghai to make hybrid cars.

Other global carmakers, such as General Motors, Toyota and Honda, also plan to sell their own hybrid cars in China in the near future. But mainland carmakers are urging Beijing to provide tax concessions to offset the higher cost of the green cars.