GM plans China ‘green’ research plant
General Motors is to build a research centre in China for alternative energy vehicles, the latest sign that China is seen as a vital battleground for a new generation of cars.
The US group, which plans to introduce hybrid cars to the Chinese market next year, said the new research facility would be part of a $250m investment in a new "campus" in Shanghai which will also include its Asian headquarters.
GM is the latest multinational to open research facilities in China in a bid to take advantage of the country's growing scientific talent and to curry favour with the government.
"We believe China has the potential to become a leader in the adoption of alternative propulsion systems," said Rick Wagoner, chairman and chief executive of GM, at a press conference in Beijing on Monday.
GM said it would also invest $5m in a new government research centre in Beijing to examine ways to reduce the country's dependence on oil.
The Chinese government is keen to encourage cleaner cars because of the rapidly mounting pollution in many of its cities and the growing need to import oil.
Many of the world's leading auto companies are vigorously lobbying the Chinese government over their alternative energy vehicles because of the growing importance of the market. China is the second largest market in the world, which means the car technologies that achieve dominance in China will help influence decisions in other markets.
As well as GM's plans for hybrid cars in China, Toyota has been selling the Prius for more than a year and Volkswagen has said it will introduce hybrid vehicles by next year. European carmakers are also trying to promote greater use of diesel engines in the country.
Mr Wagoner said that the GM research facility would focus on developing new fuels - especially forms of ethanol that are not derived from foodstuffs - and materials to improve the efficiency of vehicles.
GM already has a product development joint venture in China with its local partner, Shanghai Automotive Industry Corporation.
Although a large number of multinationals have opened research and development facilities in China, many of them are limited to modifying existing products for the local market. Many companies are still wary of doing basic research in the country because of fears that they might lose control of any intellectual property developed there.
GM has been one of the most successful automotive companies in China, providing a welcome boost given its declining sales in the US.
However, the company's sales have risen by only 14 per cent so far this year according to consultancy JD Power, against a 27 per cent increase in the whole market. ( FT )