Hybrid car owners seek subsidies

Slides
Photos

By He Bolin (China Daily)
Updated: 2009-05-11 08:01

Beijing lawyer Zhang Huibin is very proud of his two-year-old car because of one feature alone its fuel efficiency.

Zhang was prepared to pay a premium for his Prius hybrid, which is double the price of a conventional car, mainly for its fuel efficiency, even though it lacks many features offered by similar priced vehicles.

"It doesn't make much noise and you tend to forget the last time you filled up the tank," he said. "That alone doesn't compensate for paying $36,640, twice the price of a conventional car of the same size. Rather, the pleasure comes from taking a stance on environmental issues."

Sales of Toyota's Prius have exceeded 1.25 million globally, but only 3,500 of the sedans have been sold in China since they were introduced in the country three years ago. [Agencies]

However, even as he encourages more people to buy hybrid cars, Zhang and fellow Prius owner Hong Yan, from China National Automotive Industry Import and Export Corporation, have submitted a petition to several government departments calling for subsidies to private buyers of environmentally friendly cars.

"Hybrid cars are the best choice when it comes to saving energy and cutting emissions," they said in the petition. "If 10 percent of Bejing's 3.6 million cars were replaced with hybrid ones, it would save about 2 million liters of gasoline annually and also greatly improve air quality."

Government subsidies for hybrid car owners is a hot topic in an Internet chat group, set up by Zhang, which already has 108 Prius owners as members.

Public service sectors such as sanitation, mass transit and the postal service get subsidies for green vehicles hybrid cars, electric cars or fuel cell cars. The departments are given discounts of up to $7,324, $8,788 and $36,618 respectively.

Members of the group are unanimous in their support for government subsidies and see it as vital to support the nascent market for green cars. They also believe that the subsidies will encourage people's awareness about them.

Countries such as the United States and Japan have long been offering subsidies on green cars.

Wen Jundong, a 27-year-old civil servant from Shenzhen, who bought a Prius in 2006, pointed out the difference in fuel consumption between green and conventional cars. "Currently a conventional car may consume 10 liters of fuel over 100 km," he said. "I can run my car further than 200 km using the same amount of fuel."

The US sold 13 million new vehicles last year, 313,486 or 2.4 percent of them hybrids.

China, by comparison, sold 9.38 million vehicles last year, but only 2,617, or 2.8 out of 10,000, were hybrids.

Sales of the Toyota-made Prius have exceeded 1.25 million globally, but only 3,500 of the sedans have been sold in China since they were introduced in the country three years ago.

Toyota sold 899 Prius cars in China last year, below its target of 1,000. Its main competitors in the Chinese market include the Buick LaCrosse hybrid by Shanghai GM, the F3DM by domestic new energy leader BYD, the A5 BSG by Chery and the Civic hybrid by Dongfeng Honda. Sales of all the above hybrids were also weak.

According to Liu Li, sales manager at Toyota's 4S center in Chengdu, consumers worry about the cost of maintaining green car.

"Unless you are rich you wouldn't pay double the cost of a conventional car for the sake of the environment," Liu said. "More needs to be done to make being environmentally-sensitive financially viable and more important than appearance, fittings and speed."

While the Chinese auto market is far from tantalizing for green cars, China's auto manufacturers with means to build new energy solutions have long been spotlighted by investors.

Magnate Warren Buffett acquired 10 percent stake in Chinese carmaker BYD last fall. Buffett had initially offered to purchase 25 percent of BYD, but was declined by founder Wang Chuanfu due to consideration on the company's relatively small size.

Hybrid car owners seek subsidies

Buffett's move immediately raised a frenzy among stock investors who began pouring more money into Chinese auto manufacturers and relevant industries.

Stock price of Guotai International Group in Jiangsu has quadrupled since last October when its price was 4 yuan, with the market seeing bright prospects for one of its subsidiaries a global leader in the production of electrolyte for Lithium-ion batteries used in electric cars.

Also, since last October, Xiamen Tungsten Company BYD's materials supplier saw an up in its share price from about 8 yuan to 14 yuan.

But, according to the Zhang Xiaoyu, vice-president of China Machinery Industry Federation, the government is forming favorable tax policies to encourage the purchase of green cars.

Meanwhile car manufacturers are positive about the future of green cars.

Bob Carter, group vice-president of Toyota Motor Sales, said internal research showed that 93 percent of Prius owners plan to stay with the Prius when they buy their next car, making the model the industry leader in owner satisfaction.

Toyota has sold 1.7 million hybrid vehicles globally since it blazed the trail with the first Prius in late 1997.

(For more biz stories, please visit Industries)