Foreign car-makers embrace China as electric car development center

Thursday 20 April 2017 1 month ago 36   Beijing   Print

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Report  Web desk : SHANGHAI: Chinese crackdown on vehicle pollution will turn the world largest auto market into a hub for cutting edge electric car technologies previously exported from Europe and the United States, industry executives at the Shanghai motor show said. Foreign automakers have long been building cars in China to meet surging demand in the world most populous nation. But a raft of proposals to promote cleaner driving is now encouraging them to do more research in China, potentially turning the country into a world leader in a technology predicted to be a major force in the future of the industry. “We are convinced China will become the leading market for electromobility,” Volkswagen (VW) brand chief Herbert Diess said on the sidelines of the motor show. For years, carmakers have struggled to gain economies of scale to bring down the cost of electric cars, which have failed to gain traction with consumers in part because of their price. But by floating proposals to require automakers to boost sales of so-called “new energy vehicles,” or risk being penalised, Beijing has given a powerful incentive for them to focus the development of such vehicles in China. That could be a big fillip for the local economy – and a blow to other major car manufacturing nations such as the United States, Germany and Japan. Analysts at UBS say the shift from combustion toward electric cars is a 100 billion euros ($107 billion) revenue opportunity for suppliers. “There is a clear (Chinese) government policy in favour of electromobility – high subsidies and an industrial framework in the form of joint venture companies which are being encouraged to invest in this technology,” Diess said, adding Beijing appeared to be trying to replicate the success of hybrid car technology in Japan and diesel vehicles in Germany. 02