From the New York Times:
The Chinese government is putting pressure on automakers to improve energy efficiency, but consumers are increasingly interested in large sport utility vehicles and full-size luxury cars, auto executives said on Sunday at the opening of the Beijing auto show.
The shift of the Chinese market toward larger vehicles will probably push up the country’s already voracious demand for imported oil and make China an even bigger emitter of global warming gases. The trend toward big vehicles is being driven by rising incomes for China’s elite as well as government price controls on gasoline and diesel fuel that are keeping fuel prices below world levels as a way to limit broader inflation in the economy.
For the first two months of 2008, sales of sport utility vehicles in China were up 38 percent and sales of luxury cars climbed 30 percent compared with the corresponding period a year ago. By contrast, overall sales of cars, S.U.V.’s and minivans rose 16 percent.
Sales of hybrid cars have also slumped due to their higher cost and a low level of environmental awareness among new car-buyers. The Wall Street Journal reports:
At the Beijing auto show this week, companies are showing off their latest environmentally friendly technologies, including hybrid engines, electric cars and fuel-cell vehicles.
But there is little chance such innovations will help reduce the environmental fallout of the car-buying boom sweeping across China and other emerging markets like Russia and India soon.
The problem is cost. . .
Chinese manufacturers haven’t yet reached the stage of trying to make hybrids affordable as they work out technical issues, such as battery endurance and cold-weather operation.
Wu Zhixin, director of research and development at the China Automotive Technology and Research Center, a think tank in Shanghai, says his survey research shows that the majority of Chinese drivers would be willing to buy a hybrid — if the price tag were no more than 20% higher than that of a conventional car. That is a tough challenge since compact and smaller cars, which made up 67% of all car sales in China last year, are selling for as little as $4,500.
“The money being saved on gas isn’t enough to cover the higher cost of the vehicles,” says Wu Zongxin, dean of Tsinghua University’s Institute of Nuclear and New Energy Technology. Mr. Wu says the government should start replacing its own vehicle fleets with hybrids to help auto makers gain economies of scale and bring prices down.
