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Hyundai plans 'green' cars
By Gong Zhengzheng (China Daily)
Updated: 2006-03-17 06:01

South Korea's biggest carmaker Hyundai Motor is planning to introduce environmentally-friendly hybrid-powered and fuel-cell cars to China, according to a top official with its joint venture in Beijing.

Xu Heyi, chairman of Hyundai's venture with Beijing Automotive Industry Corp, told China Daily the venture would begin the commercial production of petrol-electric hybrid-powered cars before the Beijing Olympic Games in 2008.

"Hybrid" means petrol engines can power cars and produce electricity simultaneously. The electricity can also power cars, helping to lower fuel consumption and exhaust emissions.

The venture will begin to make hydrogen-powered fuel-cell cars by 2010, Xu said. Fuel cells convert hydrogen into electricity to power the car and only emit water.

"These are important part of our efforts to provide environmentally-friendly products as well as follow the central government's call to build a resource-efficient society," said Xu.

Hyundai's plans come as a slew of other foreign and domestic carmakers have already started to produce hybrid-powered cars in China or have announced they will do so. The country is the world's No 3 car market but is short of oil.

Last year, Japan's Toyota Motor Corporation kicked off production of the hybrid-powered Prius sedan in Northeast China's Jilin Province with First Automotive Works Corp. It meant Toyota became the first foreign car manufacturer to build hybrid vehicles in China.

General Motors (GM), Volkswagen and Chinese car firm Geely all plan to make hybrid-powered vehicles in China in 2008. GM says it will also produce fuel-cell vehicles in China in 2010.

Analysts say hybrid vehicles have tremendous growth potential in China as they are much more economical than standard cars.

However, hybrid engines are still a lot more expensive than petrol and diesel engines. It would take the average driver seven to eight years to recover his or her investment in a standard hybrid vehicle, and most consumers would not like that, said Michael Dunne, president of consultancy Automotive Resources Asia Ltd.

Hybrid vehicles are only likely to be chosen by a few people who are "ultra conscientious" about the environment, Dunne said.

According to industry statistics, Toyota only sold 487 units of the hybrid-powered Prius in China in the first two months of this year. The 2.0-litre car costs between 288,000 yuan (US$35,820) and 302,000 yuan (US$37,560) here.

In another development, Beijing Hyundai's Xu said the venture would launch a local-brand car in 2008 as part of its five to six new products in the years leading to 2010.

"The local-brand car won't bear a Hyundai logo, but we haven't decided on its name. It will be an economy model designed by the soon-to-be-built Beijing Hyundai's research and development centre according to Chinese customer tastes," Xu said.

He said the venture would soon begin building a new 300,000-unit plant in Beijing, including the research and development centre.

Beijing Hyundai, set up in 2002, is one of the fastest-growing car manufacturers in China.

The venture aims to sell 300,000 cars this year, Xu said.

In 2005, its sales surged by 62 per cent to 234,000 units from the previous year.

The venture now produces the Elantra, Sonata and Accent sedans, and Tucson sport utility vehicles.

Analysts have predicted China's vehicle market will total 10 million units a year by 2010, up from 5.9 million units last year.

(China Daily 03/17/2006 page10)

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