Consumer-Driven Design, Policy and Financial Support, and Technological Advancement Key to the Future Success of NEV Industry, Experts Say at the 2nd AmCham Shanghai and MOFCOM CIPA Joint Annual China Auto Forum

SHANGHAI, Nov. 25, 2011 /PRNewswire-Asia/ -- Consumer-driven design, policy and financial support, and technological advancement are key to addressing challenges holding back the new energy vehicle industry (NEV) in China, according to auto industry leaders, industry association experts and government officials at the 2nd Annual China Auto Forum jointly held by AmCham Shanghai and MOFCOM CIPA.

Themed New Energy Cars: Challenge, Progress and the Future, the 2nd Annual China Auto Forum, held on November 22 and 23 in Yancheng, Jiangsu province, focused on key challenges to the NEV industry and how automakers, domestic and foreign, auto parts suppliers, government agencies, and industry associations can work together to overcome them.  

The Forum was jointly hosted by The American Chamber of Commerce in Shanghai (AmCham Shanghai), the Investment Promotion Agency (CIPA) of China's Ministry of Commerce (MOFCOM), YanCheng Municipal People's Government, and supported by the China Association of Automobile Manufacturers (CAAM).

"New energy vehicles are important to the sustainable growth of automotive industry in China. American auto manufacturers can offer the latest technology that can help drive China's new energy vehicle development and are well-equipped to be part of the solution to the challenges currently faced by the industry," said Brenda Foster, president of AmCham Shanghai.

Automakers see the future success of NEV industry hinges on understanding consumers and the long-term policy and financial support from the government.

"The future of new energy cars will depend on what works for the consumer.  The industry needs to rethink mobility from the ground up. To win the market, auto manufacturers need to understand the charging behavior of Chinese consumers and design cars for China's future megacities," said Keith Cole, vice president of Government Relations and Public Policy, General Motors (China) Investment Co., Ltd. and a core member of AmCham Shanghai's Automotive Committee. "Like any emerging industry, it is also important to have long-term policy support from the government in order for new energy vehicles to achieve commercialization."

According to Cole, GM is set to begin deliveries of the 2012 Chevy Volt electric car in China next month and the automaker is working with General Electric to accelerate development of the charging infrastructure in China.

To boost the commercialization of NEVs, China has selected 25 cities since 2009 to introduce 1,000 new energy vehicles in each city by providing central government subsidies.  For every new energy bus purchased, the central government provides up to RMB200,000 to 260,000, in addition to co-funding from the local government. The subsidies to individual car buyers are RMB50,000 for hybrid cars and RMB60,000 for electric cars.

Automakers are also awaiting the release of China's Energy-Saving and New Energy Vehicle Industry Development Plan 2011-2020. According to Shi Jianhua, secretary general of CAAM, the plan is expected to push NEVs closer to commercialization through subsidies and preferential policies. Rising oil prices are driving the popularity of NEVs.

"New energy vehicle is a strategic emerging industry. China encourages domestic NEV makers to compete in international markets," said Zhou Ruojun, deputy director general of the Department of Industry, MOFCOM. "However, China's automakers have yet to catch up with technologically advanced countries on key energy-saving technologies and fuel efficiency to be competitive."

"The key to commercialization is technology. The NEV industry must develop key technologies for alternative energy vehicles, including enhancing consistency of batteries and developing key materials and core parts. The optimization of cost control and components supply systems will significantly enhance the competitiveness of the entire industry chain," said Shi Jianhua, head of CAAM.

Shi Jianua added, "The next 10 years will be a golden development period for NEVs. China will play a major role in terms of market size and talent resources. The key to NEV market is innovation and creation the new technology. It is not only about whole car manufacture and market strategy, but also about aligned action along the entire supplier chain in NEV industry."

Auto parts suppliers apparently see China as an important market and have laid out solid plans to build technology strengths. At the Forum, Delphi, a leading global supplier of electronics and technologies for the automotive market, said the company plans to double its engineering team in China in the future.  TRW Automotive, an auto parts maker, also expects 20% growth in R&D in the near future, and a considerable part of that to be in China.

According to Wang Cheng, executive director of China Automotive Technology and Research Center (CATARC), which is affiliated with the Ministry of Science and Technology, 10,000 electric buses are already in operation.  Wang added, "The number of electric vehicles in use is expected to reach 1 million by 2015 and 10 million by 2020."

Despite the promising outlook, auto manufactures, both domestic and foreign, also voiced some challenges they are faced with and emphasized the need for unified industry standards and more financial support for NEV makers.

Because of the variety of NEV platforms and standards, automakers often find themselves having to cater to multiple platforms and produce limited volumes for each platform.  For automakers to be efficient, the entire industry has to understand which platform will have the best payoff in the long run.

Seasoned executives from leading industry players and auto consultancies shared their perspectives at the Forum's panel discussions. Panelists included Keith Cole, vice president of General Motors China, Simon Yang, managing director, Asia Pacific, Delphi Packard Electric Systems Co., Ltd., Shi Jian, general manager, Aoxing New Energy Vehicle Co., Ltd., Ma Xian, deputy general manager, Zhongwei Coach Co., Ivo Naumann, managing director of AlexParters and Thomas McGuckin, partner, Asia-Pacific Automotive Leader, PricewaterhouseCoopers.

The Forum was co-hosted by the Yancheng Municipal Government. Yancheng is home to Dongfeng Yueda KIA's auto factory and the city is also building a new energy vehicle industry zone. This day-and-a-half Forum drew over 100 attendees, including government officials, industry experts from automotive manufacturers, auto parts suppliers and research consultancies.  

AmCham Shanghai's joint annual auto forum with MOFCOM CIPA provides a platform for dialogue between government officials and industry expert, local and international, to address hot topics in the evolving automotive industry in China and how U.S. automobile companies can play an important role in developing it.

About AmCham Shanghai

The American Chamber of Commerce in Shanghai, known as the "Voice of American Business" in China, is the largest and fastest growing American Chamber in the Asia Pacific region.  Founded in 1915, AmCham Shanghai was the third American Chamber established outside the United States. 

As a non-profit, non-partisan business organization, AmCham Shanghai is committed to the principles of free trade, open markets, private enterprise and the unrestricted flow of information.

Visit www.amcham-shanghai.org for more information about AmCham Shanghai.

About MOFCOM Investment Promotion Agency

China Investment Promotion Agency is the investment promotion agency of PR China. It is in charge of FDI in China and China's outbound investment promotion work in line with China's economic strategies and is engaged in cooperation with international economic organizations, foreign investment promotion agencies, chambers of commerce and business associations on behalf of the Ministry of Commerce.

SOURCE The American Chamber of Commerce in Shanghai