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Head of Chang’An Says China Needs to Support Hybrids

In an interview with The Nikkei Business Daily, Yin Jiaxu, chairman of Chongqing Chang’An Automobile Co., said that China’s government should consider helping automakers develop new hybrid models by offering tax breaks, financial aid or low-interest loans, as well as providing tax breaks to consumers when they purchase such cars.

Chang’An is introducing a hybrid into the domestic market (earlier post), and will have 20 of the units at the Beijing Olympics.

China will surely become the largest car market in the world, but if mileage levels do not improve, oil consumption by cars would increase to account for more than 60% of China’s total consumption.

We will need to increase sales of fuel-efficient small cars and eco-friendly autos, such as hybrid models that use both a gasoline engine and an electric motor. But Chinese tend to favor larger models with high performance and good design. The ratio of small vehicles (those with 1.3-liter engines or smaller) declined to 26.1% of all passenger cars in 2007 from 31.8% the previous year.

Yin said that the per-unit production cost for their hybrid is per-unit production cost is about 20,000 yuan (US$2,850) higher than that for ordinary vehicles in the same class.

Yin said that even with the rapid growth of the domestic market (8.8 million units in 2007, up from 2 million in 2000, with an expected 10 million this year), there is a coming shakeout among domestic automakers.

To survive, carmakers will have to meet consumer needs and withstand rising costs. Cost reduction is especially important. Prices of steel products are climbing quickly, but we cannot pass the increase on to our consumers because of the stiff competition with our rivals.

Comments

Kent Ragen

Forgot the hybrids we know today. China should leapfrog the current generation of fuel efficient cars and go straight to the next gen like Aptera http://aptera.com/
Kent
www.ecounit.com

sulleny

Actually China should work on ways to gain acceptance from a global community increasingly disgusted with their out-dated, repressive politics.

sjc

China might send this guy to a reeducation camp. People forget that this is a communist country and every time that you buy a Chinese product a lot of that money goes to the central government.

U.S. corporations used to pay 40% of the Federal budget 40 years ago, now they pay less than 7%. In China, they might let you keep enough to stay in business so you bring them more. A lot of that money goes to the military and weapons programs.

China has 1000s of uprisings in the country every year. They are not publicized because it is a censored communist country. But peasant farmers are not pleased with the government and some of their decisions. This fact makes them very sensitive to criticism from outside or inside the country.

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