China's biggest automaker SAIC puts USA ambitions on hold

Tabitha Dunn
April 20, 2017

Industry executives say long term, they expect China will insist on more electric vehicles, and to be ready, they must invest in developing those vehicles now.

The Shanghai Motor Show, which opens to the public from Friday, will display innovation of electric models that are indicated to appeal to Chinese motorists who are watching out for the unknown innovation's reliability and expense.

American automaker General Motors has rolled out its Buick Velite 5 plug-in-hybrids in China. "The time is right for Ford to expand our electrified auto line-up and investments in China".

Toyota has said it will locally build plug-in hybrids and sell them in China, starting in 2018, although it has not said when all-electric vehicle models would hit Chinese showrooms.

Chinese production ties in with the Chinese government's push for more electric cars over the next five years, with China set to become the world's largest market for EV and plug-in hybrid vehicles as the government looks to address air quality concerns.

Electrification plans have been put in place by Volvo from as early as as 2015 with confirmation coming at the Shanghai Auto Show that the first full EV would be based in the 40 Series range of vehicles.

Volvo needs the additional output in China to reach two key goals: increasing its sales in its largest-single market to 200,000 by 2020 from 90,930 last year and boosting global vehicle sales to 800,000 by the same year from 534,332 last year. It said sales will begin late this year.

The automaker is using the Shanghai show for the world premiere of its new electric-vehicle concept I.D. Crozz, which boasts a range of 500km per charge.

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Foreign automakers have always been building cars in China to meet surging demand in the world's most populous nation. The vehicle will be made by GM's joint venture with a state-owned automaker, Shanghai Automotive Industries Corp. That is partly because their vehicles cost up to 350,000 yuan ($50,000), or two to three times the price of equivalent gasoline models.

But Hyundai and Kia suffered a 52 percent on-year decline in their combined vehicle sales last month in China at 72,032 units amid a diplomatic row over Seoul's decision to deploy a Terminal High Altitude Area Defense (THAAD) battery in South Korea within this year. Buick also sells a hybrid LaCrosse in China.

China's passenger auto sales grew 8.9 per cent year on year to 1.5 million units in February, driven by the rise of sport-utility vehicles, according to data from the China Passenger auto Association.

As manufacturing volume of batteries - an electric car's most expensive component - expands, the cost should fall, making them competitive with combustion engines, Schoch said.

Hence the proposal, released in September, calling for electric or gasoline-electric hybrids to make up 8 percent of every automaker's output next year.

Those rules will likely require companies to generate as much as eight percent of their China sales with plug-in cars, either fully-electric or plug-in hybrid vehicles.

State-owned SAIC Motor's wait-and-see attitude contrasts with that of Guangzhou Automobile Group Co., which is pressing ahead with a plan to start sales of its Trumpchi brand in the U.S.

Other reports by Guamnewswatch

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