Carmakers turn to public sector

New-energy vehicles may be the answer to the worsening air quality in the mainland's major cities, but makers of electric and plug-in hybrid cars are delaying their sales plans in the consumer market in anticipation of a new round of government subsidies for buyers of these vehicles.

In an effort to meet the State Council's production target of 500,000 electric and plug-in hybrid cars by 2015, municipal governments of major cities including Shanghai, Shenzhen and Hangzhou have offered buyers subsidies of up to 60,000 yuan (HK$73,925) over the past two years to boost their sales.

But after the policy ended in December last year with no renewal announcement, carmakers like BYD are focusing their efforts on developing the public transport market first.

"We are still waiting for a new round of government policies [on new-energy vehicles]," said Liu Xueliang, BYD's general manager of Asia-Pacific car sales. "But to use them in the public transport sector would be our first priority."

BYD is not the only carmaker that hopes to break into the public transport sector with its new-energy vehicles. Rivals Nissan Motor and Ford Motor are also tapping into the market with their own solutions.

According to the China Association of Automobile Manufacturers, 84 per cent of the 27,432 electric vehicles sold in the past two years were taxis or buses, while only 4,400 were bought by individuals.