General Motors (GM) and Chinese partner
Shanghai Automotive Industry Corp (SAIC) on Saturday signed a
joint development and commercialization agreement on hybrid and
fuel cell vehicles in oil-hungry China.
The two companies will co-develop a demonstration vehicle using
the latest fuel cell technology, building on GM's Hydrogen3 fuel
cell vehicle, according to the understanding.
The two-year demonstration will start in Shanghai - where GM,
has its flagship joint venture with SAIC -the first quarter of
next year.
As part of the clean energy vehicle effort, GM and SAIC said
on October 11 the US carmaker's Allison Transmission Division
and the Chinese firm's bus joint venture with Swedish Volvo Group
will jointly develop hybrid transit buses.
GM executives said the vehicle programme is not part of the two
sides' plan to invest more than US$3 billion in China to introduce
new products and build additional production capacity over the
next three years, which was released in June.
"Our near and mid-term solutions include hybrid, which we
believe has exciting potential... Yet we see hybrid as a bridge
to hydrogen-powered fuel cells from renewable resources. We see
this as the ultimate solution for taking the motor vehicle out
of environmental equation, guaranteeing energy security,"
said Rick Wagoner, chairman and chief executive officer of GM.
"GM is striving to have commercially viable technology available
by the end of this decade. Our goal is to become the first automaker
to profitably sell 1 million hydrogen fuel cell vehicles. We believe
China can and will play a key role in making this possible,"
Wagoner said.
"Yet there are many challenges that must be overcome before
we achieve a hydrogen-based economy, such as reducing costs and
building the necessary infrastructure," he added.
SAIC Chairman Chen Xianglin said that the two companies expect
to demonstrate "phased results" of their clean energy
vehicle programme in 2008 or 2010.
To develop clean energy vehicles would appear to be an impressive
task for the auto industry, especially in China which is depending
more heavily on oil imports because of its fast-growing economy.
China imported 76 million tons of oil during the first eight
months of this year, accounting for 40 per cent of its total demand.
The nation's full-year oil imports are forecast to exceed 100
million tons.
Other foreign automakers have also showed great interest in clean
energy vehicle production in China.
Japan's Toyota clinched a deal with Chinese partner First Automotive
Works Corp (FAW) in September to start to produce its Prius hybrid
cars next year in Changchun, capital of Northeast China's Jilin
Province.
Toyota and FAW are also in negotiations to introduce the Japanese
firm's hybrid engine technologies into FAW's own car models.
Germany's Volkswagen is keen to promote its advanced diesel engines,
more efficient than gasoline engines, in China.
Volkswagen began producing diesel-powered cars in 2002 in its
joint venture with FAW, making it the first foreign automaker
to producing diesel cars in China.
"We are still optimistic, bullish and confident in China's
auto industry, although vehicle sales growth has slowed down recently,"
Wagoner said.
Sales of vehicles made in China grew by 18.4 per cent year-on-year
to 3.7 million units in the first nine months of this year.
The growth rate was down 34 per cent last year.
Growth of passenger car sales during the period declined to 20.7
per cent from 75 per cent last year.
GM is one of a few foreign automakers still enjoying robust sales
growth in China this year.
The company's sales from January to September this year were
equivalent to the total of last year, almost 387,000 vehicles,
according to Phil Murtaugh, chairman of GM China Group.
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