The world’s biggest car maker wants more market share in China

Three public car manufacturers from China, whose overall electrification plan is expected to be in the range of 20 percent to 30 percent, will lead Beijing’s trade show during the European-China summit this week.

Besides including a series of standees for energy efficient plug-in electric cars, the auto giants announced they would offer models for Beijing’s new bus fleet and multi-purpose vehicles (MPVs).

China intends to change its domestic car market from one based on heavily polluting internal combustion engines to one focused on electric vehicles (EVs). The 12th Five-Year Plan (2011-15) places electric cars at the top of the Chinese auto market priority list, with different subsidies to encourage consumption of electric cars to supply and alternative mobility in cities. China is alone in having committed $60 billion for EV development with China’s State-owned Assets Supervision and Administration Commission (SASAC) as the lead agency.

China, with an annual gasoline consumption of 9 million barrels, exported 13 million barrels to Japan for an energy-driven import habit in 2006. Total oil imports were set to drop sharply after 2008 when the automotive market for gasoline in the Middle Kingdom hit limits. More light-duty vehicles are destined for the future, but there is a critical element here: Building China’s capacity to build the GM jeep comes with a price and China is now losing in the race for electric car technology to developing countries in Africa and South Asia. General Motors, for instance, works to get its Chevy Volt and Opel Ampera micro-hybrid at home but the Government has been slow to provide financing for its automakers.

General Motors’ Vice Chairman, Bob Lutz, says China is competitive at manufacturing EVs, “there’s no question,” Lutz told Reuters last November. GM, a division of Detroit’s General Motors, will develop all those cars domestically for the Chinese market, but China’s State-owned automotive giants are steering China towards high-priced gasoline premium models and an electric car technology shift ahead of their domestic market competitors.

If China moves with speed, its domestic automakers — who dominate most manufacturers of MPVs, refuse collection vehicles and light trucks — may win what might turn out to be a billion-dollar bet. If in an age of increasing electrification in many areas, China builds the technology from the ground up to deliver an overall solution instead of taking on an established global battery and electric vehicle maker such as Toyota’s Denso, then Chinese automakers are in a fast lane.

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