September 15, 2017 / 8:33 AM / 3 years ago

China green car pivot will need state support, GM chief says

SHANGHAI (Reuters) - China’s big push towards new-energy vehicles (NEV) will require government backing to win over consumers, Mary Barra, chief executive of General Motors Co, said on Friday, amid broader industry concerns over tough NEV quotas in the market.

General Motors Chairman & CEO Mary Barra (L) and President of General Motors China Matt Tsien attend a press conference in Shanghai, China September 15, 2017. REUTERS/Aly Song

China, the world’s largest auto market, is pushing hard to develop its own green car market, with stringent quotas planned for carmakers and a longer-term aim to ban the production and sale of cars that use traditional fuels.

Carmakers, however, worry that targets for electric and hybrid cars may be tough to meet, especially as the government plans to roll back by 2020 subsidies that have supported the market’s rapid growth.

“While we are exploring all channels to boost NEV sales, building raw consumer acceptance of NEVs will depend on continued joint effort between the government and automakers,” Barra said at a company event in Shanghai.

She added that China’s push did create an opportunity for the U.S. firm, which plans to introduce at least 10 new NEVs for the China market by 2020 and open a battery plant this year with domestic partner SAIC Motor Corp Ltd.

Asked about China’s long-term plans to ban traditional gasoline cars - similar to moves in Britain and France - Barra said the shift was pushing GM to invest more in the area: “That’s why we’re investing so heavy in electrification.”

China has set goals for electric and plug-in hybrid cars to make up at least a fifth of auto sales by 2025, as it combats air pollution and aims to close a competitive gap between newer domestic automakers and global rivals.

In July, Reuters reported global makers were urging China to delay and soften planned quotas for NEVs, which they said would be impossible to meet and would hit their business.

Barra added the firm would work to “the timetable of governments”, but consumers also needed to be convinced.

“It’s best when, instead of being mandated, customers are choosing the technology because it meets their needs.”

GM’s vehicle sales in China rose 12 percent in August from a year earlier, and are up 0.3 in January-August over 2016. The carmaker and its China joint venture partners sold 3.87 million vehicles in the country in 2016.

GM produces vehicles in China through a joint venture with SAIC, the country’s largest automaker, as well as a three-way tie-up with SAIC and Guangxi Automobile Group, formerly known as Wuling Motors.

Reporting by Adam Jourdan; Editing by Clarence Fernandez

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