Beijing auto show to unveil cleaner cars
Carmakers will unveil scores of clean-energy vehicles as they try to persuade customers to swap gas-guzzling SUVs for cleaner, and pricier options.
Mon, Apr 23, 2012 at 08:30 AM
GREEN CARS: Analysts say auto manufacturers have expressed frustration at the slow rate at which the market is developing in China. So far, very few clean energy models are actually on sale. (Photo: Ed Jones/AFP)
Carmakers at the Beijing auto show are due to unveil scores of clean energy vehicles as they try to persuade Chinese customers to swap gas-guzzling SUVs for cleaner but slower and pricier options.
But analysts say the rush to showcase green technology at the Auto China 2012 exhibition, which opened Monday, is unlikely to hide the fact it may still take a long time for the Asian nation to fully embrace an electric future.
The show will see the worldwide launch of 120 new models from domestic and international brands, and will include dozens of concept cars and new energy vehicles, organisers say.
Toyota, BMW, Honda and China's Warren Buffett-backed BYD have all announced they will unveil electric or hybrid cars as part of a total of 88 new energy vehicles to be displayed at the show, which ends on May 2.
"International car makers are all trying to appease the government by showing they are indeed bringing electric vehicles to China," said Namrita Chow, an analyst at research firm IHS Global Insight.
"Almost every international automaker has announced plans for electric vehicles in China. But almost all are equally as sceptical of volume sales."
China — keen to shift from its high dependence on oil — has pledged to invest more than USD$14 billion (11 billion euro) to develop the technology and infrastructure for clean energy cars in a bid to have more than 5 million on the road by 2020.
The government also hopes that by promoting its own, homegrown technology, it will manage to get a step ahead of foreign auto firms, many of which have more than 100 years of experience in traditional car-making behind them.
As a result, Beijing has put pressure on foreign car makers to invest in the clean energy field in cooperation with their Chinese joint-venture partners, and is pushing for more transfer of technology.
The government has also launched pilot schemes around the country to try and promote the use of electric or hybrid cars and has invested large amounts of money in research and development.
In the southern city of Shenzhen, for example, authorities subsidise half the purchase of a clean energy vehicle, and Beijing has invested as much as USD$54 million (41 million euro) to develop electric batteries over the past ten years.
But despite this, sales have been disappointing.
So far, only around 10,000 to 20,000 privately-owned clean energy cars have hit the roads, according to consultants McKinsey.
And despite the anticipated green blitz at the Beijing auto show, car makers remain cautious as to when they will actually be able to mass produce in China.
Volkswagen, which has announced plans to make electric vehicles in China as soon as next year, has admitted it will probably only have managed to sell a substantial amount by 2018.
By then, it aims to have sold 10,000 such vehicles in the Asian nation — still a far cry from the number of traditional cars the German firm sells every year. In 2011, for instance, 2.6 million of its vehicles were bought in China.
"It's all about showing commitment," said Axel Krieger, a Beijing-based partner with McKinsey.
"It does not make sense from a business perspective for foreign carmakers to transfer technology and mass produce when we still don't know what the market will look like looking forward."
Analysts say auto manufacturers have expressed frustration at the slow rate at which the market is developing in China. So far, very few clean energy models are actually on sale.
"The cost of the vehicle remains high and the technology does not allow a competitive offer versus a traditional car," said Yann Lacroix, an analyst with Euler Hermes.
General Motors has priced its hybrid Chevrolet Volt at 498,000 yuan (USD$78,940, 60,018 euro).
By way of comparison, its slightly bigger Chevrolet Malibu costs between 162,900 yuan (USD$25,822, 19,648 euro) and 229,900 yuan (USD$36,443, 27,744 euro) in China.
"Auto makers are also coming up against technology hurdles and the fact that infrastructure has not been keeping up", said Jean-Philippe Millerioux, who is in charge of new energy vehicles for Peugeot Citroen in Shanghai.
Overall, analysts say the market is not expected to take off until at least 2020, when the price of electric vehicles will fall in line with that of traditional cars.
Copyright 2012 AFP Global Edition