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China to offer incentives to hybrid electric vehicles

Tony From Gasgoo.com| December 26 , 2007 14:15 BJT
Shanghai. December 26 (Gasgoo.com) China will offer preferential policies and other incentives to hybrid vehicles, according to a new energy policy guidelines prepared by National Development and Reform Commission (NDRC).
 
Under the Industry Restructuring Policy Guidelines released by NDRC, China will offer preferential policies to hybrid electric vehicles from production to consumption.
 
That means not only producers of hybrid electric vehicles will enjoy favorable policies in producing and selling these vehicles, consumers will also have more incentives to use these vehicles: the incentives will it cheaper to drive a hybrid vehicle compared with conventional engines.
 
High prices have been a barrier to the development of hybrid vehicles. Take Toyota Prius for example, this is the first hybrid vehicle introduced to Chinese market. It started locally production in Changchun-based FAW-Toyota at the end of 2005. But the sales of this hybrid vehicle are disappointingly small.

In the 11 month this year, the model sold only 405 units; while it sold 2,142 units in the same period last year.
 
Experts say disappointing sales of Toyota Prius is because of its prices (about $38,000). It is too expensive and China has not yet offered substantial policy incentives to its manufacturers and customers.
 
This month Honda Civic hybrid will be imported to Chinese market and the hybrid vehicle will be priced at 269,800 Chinese yuan (36,000 U.S. dollars). According to experts, the hybrid vehicle boasts half the fuel consumption of a normal 1.8 liter petrol vehicle, over the same distance.
 
Last month, Mitsuru Ozaki, general manager of Dongfeng Honda asked Chinese government to offer incentives to hybrid vehicles.  
 
"To make vehicle affordable to Chinese consumers, it is not enough to relay solely on reducing production cost,” Ozaki said. “It is our hope that Chinese government can hear our wishes, namely, China should come up with more incentives for hybrid vehicles.”
 
Europe and North America already have such preferential polices for hybrid vehicles in place; clearly China is left far behind in this area, Ozaki said.
 
"In the reminder of this year (one month and ten days), our target is to sell 200 Civic hybrid vehicles. However, the sales target for the next year will depend on market response,” said Ozaki. “We do not expect the model to become a hot-selling vehicle very soon.”

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