China's Cars Come in Green: Dispatch from the Shanghai Auto Show

by Alex Pasternack, New York, NY on 04.21.07

The simple fact that global automakers are throwing everything they have into two auto shows spaced just months apart speaks volumes about the former Bicycle Kingdom's appetite for the car. That the second show, starting in Shanghai on Earth Day, has gone eco-friendly is an acknowledgment of just how unhealthy that appetite could continue to be -- and a reminder of China's great opportunity to leapfrog to sustainable technologies, integrating green into its growth from the get-go. What's not helping the situation are low gas prices, which are controlled by the government (in Beijing, where over 1000 new cars hit the streets a day, a gallon of 93 octane gasoline costs a paltry $2.30). What is helping -- in spite of the upper class and government penchant for SUVs and luxury sedans -- is an ongoing push for small cars. An auto consumption tax introduced last year for instance, slashed taxes on low-emission vehicles and raised taxes on high-emission vehicles. In general, too, China's economical car culture remains stuck on smaller, more efficient models. Car manufacturers are listening. Among the show's highlights:

The newest Chevy Volt, Chinese hybrids and more below the fold...

Diesel: Volkswagon's Polo BlueMotion: as we reported earlier, this diesel gets 62 mpg average fuel consumption with 102g/km CO2 output, making it one of the cleanest internal combustion vehicles in the world. Though available in Europe, the BlueMotion (pictured above) is not yet sold in the U.S. due to current emission regulations. (VW's other greenery includes the Magotan, otherwise known as the Passat, which features an economical and low-emission engine, along with their highly efficient TFSI engine, to be manufactured in China.)

Fuel-cell: GM will show off its latest version of the sweet hybrid/electric Chevrolet Volt, with a fifth-generation E-Flex fuel cell stack; the prototype is more advanced than the one shown in Detroit three months ago, no longer relying upon a small gasoline engine as a backup. Honda will show its FCX Concept Car, its new fuel-cell vehicle, alongside its experimental Home Energy Station, which would provide hydrogen home refueling. Shanghai Automotive Industries Corp. (SAIC) will display a fuel-cell sedan with a fourth-generation stack, peak power output of 60 kW / 80.5 hp and a top speed of 150 km/h / 93 mph.

Hybrid: Like Chivas or the ubiquitous Audi A6, Buick is loved in China, and soon it will repay that love with its first ever hybrid model. The hybrid LaCrosse, which will be available by 2008, will not be sold in the U.S., not yet. Even sexier -- but less of a sure thing -- is Buick's new concept car, the gullwing Riviera, which has been outfitted with the same hybrid system set to be used in the LaCrosse. Meanwhile, Ford Motor Co.'s 52 models at the show will include its hybrid SUV, the Ford Escape; the Prius, already available in China, will show, alongside some hybrid Lexuses, like the LS600h L. China's first domestic hybrid cars come from Cherry and Roewe (or Rong Wei). The latter, a subsidiary of SAIC, has hybridized a Rover 75 (the company recently bought UK's MG Rover). Chery's hybrid is based on its A3 supermini. As a so-called mild hybrid, it is not able to run in electric-only mode, but the extra help given by the electric motor allows for fuel consumption of up to a claimed 94.2 mpg. Changan has a new hybrid gasoline-electric minivan. Meanwhile, SAIC is investing one billion yuan (US$129 million) in cleaner, more energy efficient vehicle technologies. The company hopes to produce 50,000 electric vehicles of various types by 2010, about 95 percent of which will be hybrids.

Natural gas: VW's EcoFuel Touran tall wagon is fueled by compressed natural gas, reducing CO2 emissions by twenty percent and NOx and CO emissions by eighty percent. Through a joint venture with Volkswagen, SAIC is aiming to produce 500 Touran hybrids before the 2008 Beijing Olympics.

Flex fuel: Honda's Fit FFV, runs on either 100% ethanol or a wide range of ethanol-gasoline fuel mixtures; the company has been producing and selling this in Brazil since the end of 2006.

Two big questions remain: considering that China's love for fuel efficient cars has more to do with wallets than pollution, how will domestic and foreign car makers (along with the government) encourage more advanced (and slightly costlier) fuel efficient vehicles? The Prius may be available in Beijing, but the only one I've seen is on a billboard.

Second, and related to the first: will foreign automakers transfer their green technology to their Chinese partners? As the New York Times reports:

Multinationals face repeated demands from Chinese joint venture partners to share the most advanced technology available. Katsumi Nakamura, president and chief executive of Dongfeng Motor, a joint venture in Hubei province between Nissan Motor and the Dongfeng Group of China, said that the Dongfeng side had tried to negotiate an agreement that would require the sharing of the latest technology.

But at Nissan's insistence, the final pact only calls for the sharing of "appropriate" technology. There may not be enough demand in China for advanced technologies like hybrid engines to justify the cost of setting up production in China that duplicate those in Japan, Nakamura warned.

Auto executives are reluctant to mention the illegal copying of technology in China, a problem that discouraged Chrysler from even trying to build minivans in China in the 1990s.

But, as Larry Burns, GM vice president of R&D, put it, “It’s in the best interest of the United States for China to diversify its energy resources.”

For cars, black is still the color of choice in China these days -- it's the best way to conceal all that stuff that comes out of the cars. But as long as the car obsession continues to grow -- and as long as China wants its economic growth to be sustainable -- green will need to be the new black.