China’s Hybrid Cars Market Expected To Explode
Both carmakers and component suppliers in the Chinese automotive industry are keeping a close watch on the hybrid electric cars segment, as they realize the market is likely to grow at full throttle in 2011. Although only six hybrid models were available in the market at the end of 2008, the entry of native and global brands will see this number shoot up to 19 in 2015. While native brands are likely to enter the hybrid car market with micro hybrids, the global brands, especially Japanese, are anticipated to establish a presence with mild and full hybrids. As the number of models swell, an increasing number of vehicle buyers will be able to find hybrid models that suit their needs. Toyota Motor Corporation is looking to introduce the Camry hybrid to China around 2011. Native brands such as SAIC Motor, JAC, Dongfeng, Brilliance Auto, and Faw Car have all planned to commercialize hybrid cars in the next two to three years, according to a report published by Fox Business on Feb 2, 2010.
The market has received another shot in the arm with the International Energy Agencys (IEAs) forecast that the global oil demand will reach 106 million barrels per day in 2030 from 84.5 million barrels per day in 2008. This steady rise in demand for oil will hike the price of oil globally. According to the IEAs latest report, the nominal oil price is projected to escalate to $200 per barrel by 2030, from nearly $100 per barrel in the medium term, says the analyst of this research. Rising fuel price in the long term is a key incentive to buy a hybrid, considering that better fuel economy is the primary appeal of hybrids. The predominant battery technology for hybrid cars is nickel metal hydride, while lithium ion batteries are also expected to make a splash in the market. For electric motors in hybrid cars, permanent magnet motor has emerged as manufacturers first choice.
Despite its fuel advantage, some consumers may be reluctant to invest in a hybrid due to its high upfront costs. In such a scenario, the penetration levels will depend greatly on the extent to which the central government leverages sponsorship to private consumers. Meanwhile, the government has taken regulatory initiatives to reduce CO2 emissions, giving a boost to the market. In line with the global trends, the Chinese Government has started to regulate vehicle fuel economy, notes the analyst. Since 2005, the countrys rapidly growing new passenger vehicle market has been subject to fuel economy standards, which are geared toward reducing Chinas dependence on foreign oil and encouraging automakers to bring more fuel-efficient vehicle technologies to the Chinese market. Vehicles using conventional internal combustion engines alone will be inadequate to meet the stringent emission targets. The automotive industry will have to rely heavily on fuel-efficient cars such as hybrids to comply with the legislation.
The IEAs forecast of increased oil demand over the next two decades will significantly influence the increased production of hybrid vehicles and hybrid electric cars. A good sign for the environment.
source: foxbusiness.com
