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Honda mulls making hybrids in China

Japan's Honda Motor is mulling making hybrid cars in China, where regulators want more energy efficient vehicles to help combat the nation's choking pollution problem, state media said yesterday.

Honda plans to test demand in China for its Civic hybrid cars within three months, the Shanghai Daily reported, citing a deputy manager of its China joint venture, Dongfeng Honda Automobile.

"It would be a trial operation to test the market response before localized production begins," the official was quoted as saying.

Toyota, Honda's larger rival in Japan, became the first foreign car maker to produce hybrid autos in China with its Prius model in late 2005.

The make is sold at 288,000 yuan to 302,000 yuan (US$37,400 to US$39,200), and annual sales are expected to hit 3,000 this year.

"Our hybrid Civic will have a price advantage against Toyota's Prius," the Dongfeng official said, although he could not provide a specific price.

"The market could become better for mass production if the government introduces more favorable tax policies to reduce driving costs for hybrid owners," the official said.

Hybrid vehicles, which deliver power by switching between a gasoline engine and an electric motor, can save up to 30 percent on fuel costs but they cost 15 percent to 20 percent more on average than conventional gasoline-powered models.
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