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GM to set up research center in Shanghai
2007-10-29
General Motors Corp. said Monday it will set up a $250 million alternative-fuel research center in Shanghai amid efforts by global automakers to produce commercially viable alternatives to gasoline engines. "We believe China has the potential to become a leader in the adoption of alternative propulsion systems," said GM CEO Rick Wagoner at a news conference in Beijing. Global automakers are stepping up research into fuel cells, biofuels, diesel and other power sources amid rising demand from governments and consumers for cleaner transportation and an alternative to expensive oil. Wagoner said GM picked China for the research center because of its fast-growing vehicle market, large pool of talented researchers and the communist government's push to develop alternative energy sources. "We see a lot of (government) interest in working with auto manufacturers to bring those to market as quickly as possible," he said. GM also will contribute $5 million to create an automotive energy research center in Beijing with elite Tsinghua University and Shanghai Automotive Industries Corp., one of GM's local partners. At a Communist Party congress this month, President Ju Jintao pledged to promote efforts to clean up China's battered environment as the country pursues more economic growth. Nearly three decades of breakneck growth have left China's cities among the dirtiest in the world, and the government is worried about the national security dangers of rising dependence on imported oil. China targeted cleaner automobiles as a priority in February 2006. It promised grants and tax breaks to support industry efforts. Construction of the first phase of the General Motors Center for Advanced Science and Research in Shanghai is due to be completed late next year, Wagoner said. The center will be located at GM's China headquarters in Shanghai, where the company already has an Asian regional product-development center. The new research center will work on alternative fuels, alternative propulsion systems such as fuel cells and technology to improve energy efficiency, Wagoner said. He said it will focus on the booming Chinese market but its technology also will exported to other markets. Wagoner was joined at the announcement by SAIC President Chen Hong and Tsinghua's executive vice president, He Jiankun. General Motors said previously that it plans to start selling a gas-electric hybrid vehicle in China next year. Wagoner said future development of GM's alternative vehicle product line in China would be decided by consumer demand and government policy. China is the world's No. 2 oil consumer after the United States and saw imports soar by 14.5 percent in 2006, driven by economic growth that has topped 10 percent for the past four years. Worldwide, GM expects to sell just over 9 million vehicles this year, 1 million which would use biofuel, according to Wagoner. Most of those will be sold in the United States, Brazil and Sweden. By 2012 as many as half of the GM vehicles made in the Untied States could be powered by biofuels, Wagoner said. China is the world's second-biggest vehicle market and Wagoner said it could overtake the United States as No. 1 within a decade. GM's sales in China this year for all of its brands will exceed 1 million units, Wagoner said, though he gave no details. Last year, the company said its sales rose 32 percent to 876,747 units. General Motors has estimated market share in China of 11.8 percent. China's vehicle sales jumped 25.1 percent last year to 7.2 million units, making it the world's second-largest auto market. Many of those vehicles are trucks and buses, though; passenger car sales totaled 3.8 million. GM has a joint-venture technology center with SAIC in Shanghai and operates three experimental fuel cell buses in the city.
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