Au­tomak­ers fight for slice of Chi­nese eco-car mar­ket

Enterprise - - International news -

Au­tomak­ers in China face a war of at­tri­tion in the mar­ket for en­vi­ron­men­tally friendly cars as tighter reg­u­la­tions force heavy spend­ing on de­vel­op­ment and pro­duc­tion while a slow­ing econ­omy leaves the de­mand out­look hazy.

Top ve­hi­cle man­u­fac­tur­ers from around the world laid out plans for new green of­fer­ings at Bei­jing auto show-- a mas­sive event fea­tur­ing more than 1,600 com­pa­nies and nearly 1,200 new models.

Volkswagen, still strug­gling to re­cover from an emissions scandal, was in the spot­light early on. It will in­vest more than 4 bil­lion euros ($4.5 bil­lion) in 2016 alone in such ar­eas as en­vi­ron­men­tal and safety tech­nol­ogy, said Jochem Heiz­mann, who heads the Ger­man com­pany’s op­er­a­tions here.

China is VW’s most im­por­tant mar­ket. With the govern­ment plan­ning to adopt the world’s tough­est emissions reg­u­la­tions in 2017, the au­tomaker in­tends to roll out 15 eco­car models over the next three to four years. It will be­gin fullscale pro­duc­tion of a plug-in hy­brid based on the Golf around 2018.

Toy­ota Mo­tor plans to build a plug-in-hy­brid ver­sion of the Corolla start­ing that year. The com­pany ar­ranged the roll­out sched­ule to co­in­cide with a num­ber of planned launches of plug-in hy­brids by other au­tomak­ers, said Hiroji Onishi, head of China op­er­a­tions.

Honda Mo­tor will be­gin pro­duc­tion of an Ac­cord hy­brid this July and re­lease a plug-in hy­brid in 2020. Mar­ket leader Gen­eral Mo­tors plans to spend 100 bil­lion Yuan ($15.3 bil­lion) over the next five years to pro­mote sales of elec­tric and other ve­hi­cles.

China led the world in new-car sales for a sev­enth straight year in 2015, at 24.59 mil­lion ve­hi­cles. Even if mar­ket growth slows, many still see plenty of room for ex­pan­sion, given that the coun­try has just over one car for ev­ery 10 peo­ple. Au­tomak­ers are scram­bling to roll out new models to take ad­van­tage of gen­er­ous sub­si­dies for eco-car pur­chases.

But “de­mand is strong now be­cause of the tax break on com­pact cars that started last year,” said Nobuhiko Watabe, an ex­ec­u­tive of­fi­cer at Mazda Mo­tor, adding that the true state of af­fairs is dire. Au­tomak­ers’ mar­gins are nar­row­ing as price wars be­come the norm on sales floors.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.