Govt support drives green car sales

CHANGCHUN - In a year of declining auto sales, green cars are hitting the high road.

In the first half of 2015, sales of new energy vehicles in China increased by 2.4 times year on year to 72,711, according to figures released by the Ministry of Industry and Information. Industry insiders expect 200,000 new energy vehicles to be sold in China this year.

The sub-sector's horsepower is a big contrast to overall auto sales, which saw a tepid growth of 1.4 percent year on year January-June. Interest in environmentally friendly vehicles is obvious at the ongoing International Automobile Expo in Changchun, capital of northeast China's Jilin province, where exhibitors have unveiled a number of new models.

In the hall occupied by China FAW Group Corporation, a leading vehicle manufacturer, consumers crowded to see a variety of green cars on display.

"So far, we have received tons of orders for these green cars thanks to government purchases," said a FAW member of staff at the expo on Wednesday. "We are confident about the future of these models."

Kou Chunfu, a member of the expo organizing committee, said there are 25 percent more green cars and concept cars at this year's expo than last year's.

Behind the fervor is the government's promotion of new energy vehicles amid worsening air quality. It has rolled out measures including tax exemptions, price subsidies and free number plates.

But the development of the infrastructure necessary for new energy cars has been slow, with high prices and a dearth of charging stations a big problem.

To stoke growth, the government specified last year that 30 percent of government cars should be green ones. The policy prompted governments at the local level into action. In Changchun, known as China's "City of Automobiles", an official guideline in 2014 set a target of having 5,000 new energy vehicles on the city's roads. The Changchun government also required electricity and property management departments to install charging facilities for green car buyers.

Similar policies were also issued in metropolises including Guangzhou, Chengdu, Shanghai and Beijing. In Guangzhou, for instance, the city government required that at least 18 percent of new residential or public parking lots should be installed with charging facilities.

The flurry of measures stimulated the market, with some 75,000 green cars sold last year, a record high.

More policy measures may be on the horizon.

The "Made in China 2025" plan for Chinese manufacturing released by the country's cabinet in May stipulated that by 2020, the number of pure electric cars and plug-in cars produced domestically should top 1 million. It also emphasized the importance of realizing mass production of core materials such as fuel cells.

"Government support provides wonderful opportunities in the green car sector," Li Jun, with the Chinese Academy of Engineering, believes. "It could boost sales and take the auto industry to another level."

While carmakers should try to reinvent themselves to reach that goal, the government should ramp up efforts in law- and policy-making, as well as encourage research and development to grasp core technology, according to the academic.