According to Reuters, GM (GM) will start to build a hybrid car in China. The problem is that, in a country where the government underwrites that price of gas, there is no demand for green cars.
But, GM may be clever. The car will launch around the 2008 Olympics and the No. 1 US car company should get plenty of free PR for its new product.
And, China is considered the air and water pollution center of the universe, so GM can say it is doing its part to help clean up the mess.
The GM move may also be a good bet on the future. The communist government cannot afford to keep down the retail price of fuel forever, especially not with oil above $95. With a GDP moving up at over 10%, China’s demand for oil is growing at an alarming rate. It has to find some economies within its industries and consumer activity.
A hybrid car may help fit that bill.
Douglas A. McIntyre
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