SAIC Motor Corp will spend 2 billion yuan (US$294 million) with its parent on a venture making green vehicles.
China's biggest auto maker plans to take 10 percent of the venture, which will focus on the development of hybrid and electric vehicles, according to a statement filed to the Shanghai Stock Exchange yesterday.
Its parent company, Shanghai Automotive Industry Corp, will have a 90 percent share in the venture.
SAIC Motor said the new venture will also push research and development of core spare parts for the new energy vehicles such as electric transmissions and new power systems.
Car makers have been called on to pour more resources into rolling out models powered by alternative methods to lower fuel consumption and meet higher emission standards. They are also motivated by a rising market demand for eco-friendly vehicles caused by the fuel crisis and growing pollution.
Hybrid vehicles are powered by gasoline or diesel engines and electric batteries.
SAIC earlier said it will mass produce the hybrid vehicles by 2010 with an annual production target of 10,000 units. It also pledged to speed up development of fuel cell vehicles and build its own engineering capability. Buses using dimethyl ether are also a priority for SAIC.
SAIC's car venture with General Motors Corp launched its first locally produced hybrid car, the Buick LaCrosse hybrid sedan, in January.
Shanghai General Motors is also expected to produce fuel cell vehicles after 2010, making China one of the first to produce green vehicles.
(Shanghai Daily November 26, 2008)
