Honda Will Be Late To The Chinese Hybrid Revolution

Everybody was betting big on electric cars in China. Everybody thought China will be the world's biggest market for EVs. It was a bluff. At the Shanghai Auto Show in April, the smart money suddenly was on hybrids. Insiders expect that the Chinese government will extend bigger subsidies to buyers of hybrid cars, after the big electric car revolution in China turned out to be a bust. This is good for Japanese carmakers – for some at least. Honda will delay Chinese production of hybrids for up to three years while it develops local sources for cheaper components, Affordability is critical," a Honda spokeswoman told Reuters The wire thinks the sudden retrenchment is because "Toyota Motor Corp said last month it was trying to source key hybrid components in China to make hybrids more affordable. Toyota said it was planning a joint venture in China with a local supplier to produce batteries for gas-electric hybrid cars." Reuters confirms again that "Toyota – and other automakers in China, both indigenous Chinese and foreign – gear up to try to kick-start sales of "conventional" hybrid cars in China in anticipation of policy changes aimed at boosting sales of hybrid vehicles." Under the old policy, China offers generous subsidies for EVs and plug-ins, but finds few takers. A change of mind towards hybrids is widely expected. Says Reuters: "A growing number of industry insiders and experts believe Beijing will boost purchase subsidies significantly for conventional hybrids as early as this year." The Chinese car market tilts heavily towards cars that don't use much gas (or "oil," as the Chinese like to say,) but the Chinese also like a deal. Incentives on hybrids would blow that segment wide open. However, the government won't incentivize imports from Japan, hence the race for local sources. from The Truth About Cars http://www.thetruthaboutcars.com

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