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Eco-friendly cars creating little buzz

BYD's Qin, released a year ago, is fighting an uphill battle, with monthly sales slumping at a meager 1,000-plus.

GUANGZHOU, China -- Green cars have failed to gain traction among Chinese consumers despite an aggressive government push that includes generous subsidies and regulatory reform.

     The government has set a sales target of 336,000 electric and plug-in hybrid cars in a three-year period through 2015, but as of September, the cumulative figure was at 38,600, or a paltry 11.5% of the target. Automakers now face the tall order of selling more than 300,000 green cars in just about a year.

     Leading local eco-car manufacturer BYD has been fighting an uphill battle. It released the Qin plug-in hybrid a year ago, but sales have been sluggish at just over 1,000 units a month. The figure for November came in at roughly 1,700.

     Its new plug-in hybrid, the Tang, was supposed to hit showrooms this year, but amid slumping sales, according to reports in the local press, its debut has now been put off until the end of January. The company is developing yet another new model, but the release date is apparently up in the air.

     In addition, BYD offers a high-end model. Joining hands with Germany's Daimler, the Chinese automaker co-developed the Denza, an all-electric car priced at roughly 400,000 yuan ($64,500). Given its steep price tag, whether its sales will grow is anybody's guess.

     New-energy vehicles face challenges on multiple fronts.

     The perception is widespread among consumers that electric cars and hybrids are pricey to begin with. To dispel such concerns, municipalities offer subsidies that vary by locality. But many local governments have been slow to work out the details of such incentive programs, forcing interested consumers to hold off on buying new-energy cars.

     Even the city of Guangzhou, a hotbed of automobile and parts production in Guangdong Province, did not unveil its green-car subsidy program until earlier this month. The program will save a Guangzhou buyer of an affordable model in the price range of 80,000 yuan to 150,000 yuan up to 66,500 yuan. In case of luxury models selling for more than 250,000 yuan, subsidies will max out at 117,000 yuan.

     Local governments are flexing their muscle to give an extra push or two to green cars. In Guangzhou, for example, license plates are hard to come by, as issuance is limited in light of traffic congestion and air pollution. But electric and hybrid vehicles are exempted from such restrictions.

     Infrastructure is woefully underdeveloped, with a lack of charging stations impeding the spread of electric cars. Guangzhou is working on this front as well. New parking lots and garages will be required to dedicate at least 18% of parking spaces to charging stations.

     Yet how these measures will help promote eco-friendly cars remains to be seen, given slower growth in China's auto market.

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