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Rough Road for Hybrids in China

Toyota and Honda are selling eco-friendly cars in mainland China and GM is close behind. But high prices and murky policy have crimped sales
A cut-away demonstration model of the F6 DM car from BYD Company Ltd. of China showing a place where ordinary household electricity can be plugged in to charge batteries in the hybrid vehicle.
A cut-away demonstration model of the F6 DM car from BYD Company Ltd. of China showing a place where ordinary household electricity can be plugged in to charge batteries in the hybrid vehicle. STAN HONDA/AFP/Getty Images

China, so notorious for its toxic air that athletes competing in this summer's Olympics are desperate to spend as little time in Beijing as possible (BusinessWeek.com, 2/12/08), should be a promising market for eco-friendly hybrids. Auto sales grew 22%, to 8.8 million last year, and will probably top 10 million in 2008. Meanwhile, oil imports have soared and air pollution increasingly clogs the skies of China's cities. But high sticker prices for hybrids and unclear policies from Beijing have deterred many buyers, and companies that have tried to sell green cars so far have met with disappointing results.

Still, companies are hardly giving up. The latest is General Motors (GM). On Jan. 22, the American giant known for its gas-guzzling heavy metal announced it will produce a hybrid later this year in China. GM will launch the Buick LaCrosse Eco-Hybrid, an upper- to mid-end sedan with a 2.4-liter engine. (The exact date and price have not been announced.) Toyota Motor (TM) started selling its Prius in China in 2005 and now assembles the world's most popular hybrid in the northeastern city of Changchun. Honda Motor (HMC) started importing its Civic hybrid from Japan last year.