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Beijing To Help Pay For Green Cars

Peggy Sito and Reuters – Jan 28, 2009

Beijing will subsidise purchases of clean-energy vehicles in 13 mainland cities in a move to encourage carmakers to build environmentally friendly vehicles.

The trial scheme would promote the use of electric, hybrid and fuel-cell vehicles by public transport operators, taxi companies and postal and sanitary services in the cities, Xinhua reported, citing a Ministry of Finance statement at the weekend.

The 13 cities are Beijing, Changchun, Changsha, Chongqing, Dalian, Hangzhou, Hefei, Jinan, Kunming, Nanchang, Shanghai, Shenzhen and Wuhan.

Subsidies would be based on the price difference between vehicles with more energy-efficient engines and those with traditional engines, Xinhua said.

Local governments were asked to allocate money to build and maintain facilities for the green vehicles. The announcement is in line with the central government’s plan to promote the development of vehicles using alternative energy.

In November last year, Minister of Science and Technology Wan Gang said the government would launch a massive scheme to promote such cars. Ninety per cent of public vehicles would be hybrid initially, he said without giving a time frame.

China is widely believed to be the biggest source of carbon dioxide and greenhouse gas emissions from its manufacturing, energy and transport sectors, which have been blamed for rising global temperatures.

The central government is urging carmakers to take advantage of a reshuffle in the global car industry to speed up the development of vehicles running on alternative energy.

Local and global carmakers started to invest in green car manufacturing during the 11th Five-Year Programme lasting until next year.

Separately, Honda Motor, a pioneer in environmentally friendly cars, said yesterday it planned to increase its production capacity on the mainland by 23 per cent on expectation of solid demand for its fuel-efficient vehicles, according to a report.

The Nikkei business daily said Honda targeted a total output capacity of 650,000 vehicles per year by making multibillion-yen modifications to existing lines at its Dongfeng Honda Automobile unit, which assembles Civic cars and CR-V sport-utility vehicles.

Output at Dongfeng Honda on the mainland has steadily risen in recent years, producing more than 160,000 vehicles last year, up almost 30 per cent from the previous year, another company official said.

The company is hoping to raise its output to a full capacity of 240,000 vehicles, bringing Honda’s total mainland output to 650,000, she said.

The mainland vehicle sector grew 6.7 per cent last year. While outperforming developed nations, the rate was the country’s slowest in a decade and a sharp fall from 21.8 per cent the year before.

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