Sat, Sep 10, 2005 - Page 11 News List

German automakers plunge into hybrid car market


German carmakers, which have long favored diesel engines as their primary response to economic and environmental concerns, are scrambling to develop hybrid gasoline-electric cars as sales of these vehicles soar in many places along with fuel prices.

Volkswagen said Thursday it would develop, assemble and sell a hybrid minivan in China in cooperation with a Chinese automaker, a move that underlines the Chinese auto industry's rapid move into an advanced technological area of automotive design.

A day earlier, BMW announced that it would join an existing hybrid technology joint venture set up by DaimlerChrysler and General Motors. It did not say when it would roll out its first hybrid vehicle.

Volkswagen's announcement is its first public confirmation of plans to make and sell a hybrid anywhere in the world. It said it would develop hybrid technology on its own, rather than with a partner, for Europe and the US, according to Reuters.

Toyota, which dominates the market, sold more than 60,000 hybrids in the first six months of this year. It hopes to sell more than a million worldwide by early in the next decade. By 2008, Americans will be able to choose among some two dozen hybrid models from several carmakers.

"Until now," said Arndt Ellinghorst, an auto analyst at Dresdner Kleinwort Wasserstein here, "the Germans thought, `We can make it with diesel.' They saw hybrid as a technology that was just filling a gap. Now they're seeing that, particularly in the US, they're missing a market."

Volkswagen said it planned to develop and build a hybrid Touran minivan, in cooperation with the Shanghai Automotive Industry Corp, and begin marketing it during the Beijing Olympics in 2008. Its announcement signified the first effort by a multinational automaker to develop a hybrid in China.

Honda, Toyota's principal rival in the global market for hybrid vehicles, has not announced plans to build or sell hybrids in China. But a spokesman said the company was aware that fast growth in Chinese auto sales might make hybrids attractive for the market.

For BMW, the decision to join the GM-DaimlerChrysler venture was driven in part by a recognition that more advanced alternatives to fossil fuel, like hydrogen, might be further away than it first thought. BMW has built a version of its luxury 7-series sedan that runs on liquid hydrogen or gasoline.

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