China's auto sector pushes for electric cars

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Japan's Honda Motor Co will launch an all-electric battery auto in China next year as demand for plug-in electric vehicles (EVs) expands in the world's largest automobile market, a senior company executive said. Despite that, sales of electric and gasoline-electric hybrids fell 4.4 percent from a year earlier in the first quarter to 55,929 vehicles while SUV purchases rose 21 percent to 2.4 million.

"It's tough for someone with an EV to come and take away market share from SUVs", said Ben Cavender of China Market Research Group.

The Shanghai Auto Show, which opens for the public on Friday, is seeing electric and hybrid cars from all the participants from all over the world.

Growth in SUV segments and new energy vehicles, especially electric cars, can help the Chinese auto market expand 8 percent per year, Francois Provost, senior vice president and Asia-Pacific chairman at Renault, told CNBC on the sidelines of the show. By 2025, Skoda plans to have five purely electric cars on the market. Industry officials and experts reckon tightening fuel efficiency regulations through 2020 will compel auto makers to rely more on electrification to boost average fuel efficiency despite the drop-off in subsidies.

"We are going to localize electric cars for Mercedes-Benz", Daimler's board member responsible for China, Hubertus Troska, said.

Xu Yanhua, deputy secretary-general of the China Association of Automobile Manufacturers, forecasts NEV sales this year of 800,000 units, representing year-on-year growth of 60 per cent.

That is why even as automakers fight electric vehicle mandates in the United States, they are scrambling to develop more plug-in electric hybrids and electric battery cars for China.

Volvo will build its first fully electric vehicle in China, the company announced at the Shanghai auto show today.

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Volvo Cars has announced that it will build its first fully electric auto in China, as part of its larger commitment to sell a total of 1 million electrified cars - including fully electric cars and hybrids - by 2025.

Michael Yang, director of SAIC's worldwide division, revealed at Auto Shanghai on Wednesday said it will focus on its efforts in China and Europe for now.

In the latest draft policy released in September, Beijing proposed a requirement that they generate credits equivalent to 8 percent of automakers' sales next year by selling battery electric or plug-in hybrid vehicles, rising to 10 percent in 2019 and 12 percent in 2020. News reports say regulators might have agreed to lower or delay them in an updated plan due out this year, but there has been no official confirmation.

China has also seen great rise in the sales of SUVs which is why most automakers are also showcasing their gas-guzzling SUVs.

SAIC, the country's largest automaker, said it expects to double sales to 600,000 units this year.

Volkswagen, China's overall market leader, will introduce a range of new SUV models in China this year and ramp up production of electric vehicles, said its China CEO Jochem Heizmann.

Daimler, which has trailed German peers BMW and VW-owned Audi in terms of expanding its Chinese manufacturing capacity, is also preparing to make Mercedes-Benz electric cars in Beijing. The Czech carmaker describes it as an SUV coupé that has a range of up to 500km on a single charge, with a top speed of 180km/h.

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