Chinese prefer gas-guzzling vehicles?

April 23, 2013 at 3:34 PM
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SHANGHAI, April 23 (UPI) -- Although exhaust fumes are considered a major contributor to China's worsening air pollution problem, Chinese drivers are increasingly opting for midsized cars and sport utility vehicles, industry executives at the Shanghai Auto show said.

General Motors announced at the show that it would launch nine new or restyled SUV models in China over the next five years and revealed it plans to build four more factories, adding 6,000 jobs, The New York Times reports.

"Our focus is on luxury vehicles and SUV's going forward," said Bob Socia, president of GM China. "Not long ago, both were considered niche segments. Both are now mainstream and growing rapidly," he said of the Chinese market.

Socia predicts SUV sales in China would double by 2015, to 4 million vehicles.

China surpassed the United States in 2009 as the world's largest market for new vehicles.

China's overall auto sales rose 13 percent in March and sales are on course to reach nearly 21 million vehicles this year. That compares with forecasts in the United States for sales of vehicles to total about 15 million.

A Chrysler executive disclosed that, by the end of next year, it would begin making Jeep Cherokees in Changsha, China.

In an interview with China Daily on the sidelines of the show, Daimler Greater China's new chairman and chief executive, Hubertus Troska, a 25-year veteran of Daimler AG -- whose divisions include Mercedes-Benz -- said that China will be the most important premium car market "very soon."

Daimler in 2010 worked with China's BYD Auto to create the first electric vehicle joint venture in China.

"Since then, both partners put in their joint efforts and experiences to develop the safest and most reliable electric vehicle from China, for China," Troska said.

Yet there are challenges for electric vehicles to catch on in China, as in other markets.

"The customers' willingness to pay for the still expensive technology as well as the infrastructure for charging is an issue," Troska said, adding that more subsidies and incentives would be needed to boost the market.

At last year's show, Honda launched three hybrid vehicles. But of the more than 600,000 Hondas sold in China in 2012, only slightly more than 500 were hybrids, the Financial Post reports. None of the four of Honda's new concept and production vehicles unveiled by Honda at this year's show were hybrids or electric.

"We think there are still more Chinese consumers who want to simply buy a car that fits their needs rather than buy a hybrid," Honda Motor Co. Chief Executive Officer Takanobu Ito said at the Shanghai show.

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