Bloomberg News

General Motors to Test Chinese Plug-in Vehicle Market With Volt

November 30, 2011

Nov. 18 (Bloomberg) -- General Motors Co. will introduce its Chevrolet Volt plug-in hybrid car in China at an auto show on Nov. 21, and dealers will begin taking orders for the model “shortly,” the automaker said.

“This will be relatively low-volume,” Kevin Wale, president of the Detroit-based company’s China unit, said in a phone interview yesterday in Shanghai, declining to comment on specifics including pricing before the show in Guangzhou. “We’re trying to use this as a statement for technology and the beginning of the path towards electrification.”

GM will be first among the world’s largest automakers to sell a plug-in car in China, where rivals including Daimler AG and Nissan Motor Co. also plan to introduce similar models. Electric-car sales in China are forecast to exceed those in the U.S. by 2020, helped by government subsidies and investment as the Asian nation, the world’s largest polluter, seeks to cut emissions, according to the Boston Consulting Group.

The Volt, which is powered by an electric battery for about 40 miles before a gasoline engine kicks in, retails in the U.S. for $39,995 before a federal tax credit.

The model will complement an all-electric car that GM is working to develop with its Chinese partner, SAIC Motor Corp., Wale said.

Daimler is working with Shenzhen-based carmaker BYD Co. to introduce an electric vehicle in China in 2013, the Stuttgart, Germany-based automaker said in April. Nissan plans to export its all-electric Leaf car to China for fleet sales, the Yokohama, Japan-based company said in September.

Toyota Prius

Toyota Motor Corp. started a yearlong test of its Prius plug-in hybrid in the city of Tianjin early this year, and the model isn’t being sold to consumers yet, said Niu Yu, a spokesman for the Toyota City, Japan-based automaker.

Electric cars may account for as much as 7 percent of total auto sales in China, the world’s largest vehicle market, by 2020, Boston Consulting said in a June 14 report. Chinese consumers are more receptive to the technology than their U.S. and European counterparts, with more than 90 percent showing interest, the report found.

“To achieve a breakthrough, carmakers must offer attractive mass-market vehicles, and the vehicles’ relatively high price and smaller driving range must be addressed,” said Marco Gerrits, a Beijing-based partner at the consulting company.

Currently, buyers of energy-efficient cars in Shanghai, Shenzhen and four other Chinese cities qualify for a 60,000 yuan ($9,450) subsidy. The government aims to have 1 million electric-powered vehicles on the road by 2015, according to the Ministry of Science.

Lower Parking Fees

State media have reported China would support the use of such vehicles through favorable policies and buying incentives. Alternative-energy cars will be exempt from current license- plate and traffic restrictions in some major cities, Xinhua News reported Nov. 12, citing a government notice.

There are 25 Chinese cities running trials for alternative- energy vehicles, and local authorities must develop policies to promote their adoption, including building charging points at government agencies, hospitals and shopping malls, Xinhua said.

The trial cities should also lower fees for parking, electricity and road use for such vehicles and adjust the purchase policies of government agencies and state-linked companies, according to the report, citing the National Development and Reform Commission and the ministries of science and technology, finance, and industry and information Technology.

China Demand

China’s auto demand may grow 5 to 10 percent next year, driven by demand for passenger cars, Wale said today. Sales of commercial vehicles, which have dipped this year, will grow 5 percent, he forecast.

GM will expand its luxury Cadillac brand and distribution network and broaden its range of sport-utility vehicles, he said.

“We’re seeing a much greater move to individuality in terms of colors and body styles,” said Wale, who aims for GM’s China sales to grow faster than the overall market in 2012.

The U.S. carmaker is counting on China to overtake Toyota in global sales this year. GM expanded deliveries in the Asian nation 6.9 percent from a year earlier to 2,113,274 vehicles in the first 10 months of 2011, according to the company.

--Liza Lin. Editors: Terje Langeland, Chua Kong Ho

To contact the Bloomberg News staff for this story: Liza Lin in Shanghai at llin15@bloomberg.net

To contact the editor responsible for this story: Chua Kong Ho at kchua6@bloomberg.net


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