Huang Jihai considered buying his 28-year-old daughter the world's first plug-in hybrid as a wedding gift in Beijing before choosing to save 16,900 yuan ($2,500) with a gasoline-powered car instead.
"Some of the hybrids and electric cars look pretty cool, but they are too expensive," said Huang, 51, who opted for a General Motors Co. Cruze. "I'd rather spend less money on a reliable gasoline car."
Automakers including GM and Nissan Motor Co. plan to display a record 95 alternative energy-powered models at this year's Beijing Auto Show, which opens to the press tomorrow. While China's government has touted less-polluting cars as a way to improve air quality and cut reliance on imported oil, it has delayed a plan to introduce subsidies that may put the models within reach for buyers like Huang.
A lack of affordability may limit sales of such vehicles by GM, Nissan and Toyota Motor Corp., which have all announced plans to introduce new hybrids and electric cars in China by 2011. The sluggish demand is also curbing investment in less- polluting car technology, prompting domestic automakers to seek foreign alliance partners to help fund development.
"It's unrealistic to expect consumers to jump into the technology." said Bill Russo, a Beijing-based senior adviser at Booz & Co. "You don't have to be too advanced in math to realize that the gas-powered cars are much cheaper and probably deliver more performance and better range."
Buffett's BYD
BYD Co., a Shenzhen-based carmaker 10 percent owned by Warren Buffett's Berkshire Hathaway Inc., delivered 48 of its F3DM plug-in hybrids in 2009 at 149,800 yuan apiece. By comparison, the company sold 290,963 of the gasoline-powered F3, which starts at 59,800 yuan and was China's best-selling model.
Toyota sold 271 of its 259,800-yuan Prius cars, the world's top-selling hybrid, in China last year, according to the China Association of Automobile Manufacturers. Overall passenger-car sales in the nation totaled 10.3 million.
Local sales of Honda Motor Co.'s Civic hybrid fell 4.9 percent to 193 units last year, making it the least popular Honda-brand model in China, according to Yoshiyuki Kuroda, a company spokesman. The model is imported from Japan, adding a 25 percent tariff to the price tag.
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