New-energy vehicles take spotlight at Shanghai show

Reuters) - Electric and “new-energy” vehicles took the spotlight at China’s Shanghai Auto Show on Tuesday with Honda Motor Co and one of its Chinese partners joining the ranks of other car makers announcing new models of energy efficient cars.

While car makers are bullish about the future of the “green” vehicles in the world’s largest auto market, questions remain over China’s use of coal to generate the majority of its electricity, consumer perceptions about the safety and convenience of electric cars and not least, the Chinese government’s plans and policies for the electric-hybrid industry.

Honda is working towards the goal of producing electric cars in China in 2012, Chief Executive Takanobu Ito said on Tuesday.

At a roundtable discussion at the show, Honda’s China chief, Seiji Kuraishi, was asked about the significance of introducing an electric car in China.

“For Honda, as a company that is promoting low-CO2 emission vehicles and green technology, we want to build a brand around that in China,” he said. “The CO2 issue is a very serious one in China and we think electric cars will be one solution.”

But, he added, “Whether or not it will work as a proper business is a separate matter right now.”

Ito, speaking alongside Kuraishi, said Honda did not have a specific target for EV sales in China and Kuraishi added that he wanted to produce EVs, albeit in small volumes, with both of Honda’s joint venture partners, Dongfeng Motor Group Co Ltd and Guangzhou Automobile Group Co Ltd.

Kuraishi said it was not clear how the Chinese government’s incentives policy on EVs will evolve. While the government had at one point been seen as likely to aggressively promote pure, battery-run EVs, it was gradually warming up to hybrid technology, Kuraishi said.

“I think the government has concerns over the quality of motors, durability, and safety issues when it comes to EVs,” Kuraishi said.

Those safety issues were highlighted last week when a Zotye Langyue EV taxi caught fire in Hangzhou.

Guangzhou Automobile, China’s No.6 domestic automaker, plans to sell 200,000 new energy cars by 2015, the company said in a statement issued at the Shanghai Auto show.

Guangzhou Auto, which is also a partner of Toyota Motor Co and Fiat SpA, is seeking a listing on the Shanghai stock exchange through a merger with its unit, GAC Changfeng Motor Co Ltd.

It plans to convert Changfeng, which makes vehicles with Japan’s Mitsubishi Motors Corp and other brand names and provides automobile components, into a 50/50 joint venture with Mitsubishi.

Dongfeng Motor Group, China’s No.2 automaker, also plans to launch its first electric cars in China next year and is targeting to sell 100,000 of such cars by 2015, Zhu Fushou, president of Dongfeng Motor Group, told Reuters on the sidelines at the Shanghai auto show.

Dongfeng and Japan’s Nissan Motor Co operate one of the most successful ventures in China, called Dongfeng Motor Co, selling passenger cars under the Nissan brand and commercial vehicles under the Dongfeng nameplate.

It also has vehicle manufacturing ventures with Honda and PSA Peugeot-Citroen Group.

Ford Motor Co too is getting into green car business in China and said Monday that it was bringing a test fleet of electric vehicles to China later this year, including its Fusion hybrid.

The No.2 U.S. car maker unveiled three electric vehicles: the new Focus all-electric vehicle, the C-MAX Energi plug-in hybrid, and the Fusion hybrid.

Toyota is also getting into the green car game. Company President Akio Toyoda said in a prepared speech that it would use Toyota Motor Engineering & Manufacturing (China), one of its research and development centres, “as a core to strengthen production in China of energy efficient cars and energy efficient components.

“Our plans are not strictly limited to development,” he said, “but to the entire Chinese management structure as well.”

As global car makers rush to tout their green credentials by introducing hybrid and electric vehicles at venues like the Shanghai Auto Show, one topic often overlooked is the source of electricity that powers those vehicles. And in China, that source is almost invariably coal, one of the most polluting fuels used in the world. Another challenge facing the industry in China is setting up the infrastructure to allow consumers to easily charge their vehicles.