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China aims to be world pacemaker of new-energy auto production
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April's Auto Shanghai 2009 show highlights the use of energy-saving automobiles, with several well-known auto-makers, including GM and Ford, set to announce new products.

For many Chinese exhibitors this will also be a good platform to show new-energy products. Domestic carmakers including Geely and BYD announced earlier that they would unveil new-energy vehicles, while the country's first hybrid sport utility vehicle (SUV) CS7 is expected to make its debut.

New-energy autos mainly refer to electric vehicles (EV) -- driven by an onboard power generator; hybrid electric vehicles (HEV) -- which combine two or more propulsion system and can save as much as 40 percent of the fuel, and hydrogen or solar energy cars.

These automobiles, which features less reliance on gasoline and diesel, energy-saving and environment protection have attracted many countries worldwide to set foot in research and development in the hope of saving energy.

Industry insiders expect China to become the pacemaker of a new-energy automobile industry in the future thanks to strong policies from the government and a full industrial chain.

On March 20, China unveiled a revitalization plan for the domestic automobile industry, which outlines the details of enlarging new-energy auto production, and developing spare parts and components.

The plan said the country would channel "special funds" from the central budget to encourage use of new-energy autos. Government or companies that purchase the cars are expected to get a compensation of 4,000 yuan (585.6 U.S. dollars) to 25,000 yuan per car.

By 2011, annual production capacity of new-energy autos should stand at 500,000, and 5 percent of new vehicles, including lorries and buses, should be new-energy ones, according to the plan.

Li Chunbo, the CITIC Securities analyst, told Xinhua on Wednesday:" China doesn't occupy a leading position in developing traditional oil-fueled vehicles, but it has great potential in new-energy car production, if it takes advantage of policies."

Pei Pucheng, China's Society of Automobile Engineers praised the measures as a "positive signal" at the same time, saying favorable policies would guide more enterprises to engage in the industry, attract more talents and encourage consumption.

Worsening air conditions and energy shortages have been big risks to China's economic development and environmental protection.

China had 50 million automobiles in 2008, and it is estimated that the figure will hit 150 million by 2020, and fuel consumption is expected to top 250 million tonnes of oil.

China ranks the third largest auto producer worldwide in terms of production capacity, only behind the United States and Japan. Last year, the country produced 9.35 million automobiles, an increase of 5.21 percent year on year.

Wan Gang, minister of science and technology, underscored that it was a very good opportunity for China to develop self-made new energy autos.

The country is very likely to shift from the status of a "large producer" to "leading producer" of autos gradually, he said.

Expert Pei said, although China had been developing new-energy autos for a very short period of time, the country was playing an important role in battery production, one of the most important parts of a new-energy auto.

"The most widely-used auto batteries are lithium batteries. The performance of batteries directly decides the quality of new-energy automobiles," Pei noted.

CITIC Securities issued a report in March, which said "It appears that more and more lithium battery producers are moving to China. This will help China to occupy more market share in the new-energy auto market."

China has about 200 lithium battery enterprises, accounting for 40 percent of the world battery production. BYD company limited is not only an auto producer but also the leading enterprise in lithium battery production.

Last December, BYD unveiled F3DM hybrid automobile, which was driven by a lithium iron phosphate battery. This battery established its name for low-cost and high-efficiency.

Another domestic auto-maker, Chery Automatic Company, announced in February a new vehicle with a maximum speed of 120 km per hour.

Chen Quanshi, an expert with automobile engineering school of Tsinghua University, told the reporter on Wednesday that the country's auto industry was expected to enter a "golden era" with the support of government policies and a developed industry.

"The government should make more efforts to make new-energy automobiles popular, and further reduce production costs," Chen added.

The 13th Shanghai International Automobile Industry Exhibition, also known as Auto Shanghai 2009, will be held between April 20 and 28 in Shanghai.

(Xinhua News Agency April 15, 2009)

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