Beijing’s bus boom

Chinese cities are making big investments in environmentally-friendly buses

Beijing’s bus boom

Tickets please: China's bus manufacturers clean up their act

You wait for an environmentally-friendly bus and then three come along at once. Go to any major Chinese city and you are likely to see buses that boast pure electric locomotion, a fuel cell, or some form of energy-saving hybrid approach.

In early 2008, for example, Shanghai led a pioneering effort to trial six hydrogen-powered fuel cell buses. Not to be outdone, Beijing’s Olympic organisers ferried athletes around in 25 hybrid electric buses and three fuel cell buses. They also employed 415 electrically-powered vehicles at the Games’ venues. Chinabuses.com notes that as of November, there are 17 Chinese cities – including the likes of Tianjin and Wuhan – buying hybrid buses.

This is more than a few local councillors trying to boost their green credentials. Indeed, in one of the more environmentally-friendly parts of its latest stimulus package, the government is intent on promoting the industry aggressively. So far it looks like domestic manufacturers will stand to gain most.

According to Chinabuses.com, there are more than 30 Chinese manufacturers involved in this area. Industry excitement rose recently when Beijing’s deputy mayor, Gou Zhongwen told the Beijing Youth Daily that the purchase of 1,000 environment-friendly vehicles was a “first priority” for his local government, especially as they represent the innovative work of Chinese companies. Gou also expects that his new fleet will offer immediate environmental benefits: a 20% energy saving and a 15%-20% reduction in the amount of pollutants discharged.

One of the chief beneficiaries of this announcement could be Foton, a Chinese manufacturer which has worked closely with the research centres of Tsinghua University, Tongji University and Beijing Institute of Technology. In late December it officially established the Beijing New Energy Auto Design and Manufacturing Industrial Base.

No one could write off its ambitions as paltry. It is investing Rmb5 billion ($730 million) in the production of 5,000 buses and 400,000 energy-efficient engines. The self-proclaimed goal is to become “China’s largest new energy automotive design and manufacturing engineering base.”

Foton is among a handful of manufacturers approved by the Ministry of Science and Technology to take part in what is being termed (rather inelegantly) the New Energy Vehicle Project. Among this handful, it looks to be in the driving seat as it has been investing heavily in the industry since 2007.

Foton is not short of competitors, and according to research at Southcn.com they are all “sharpening their swords for battle.” JMC could be another major player. In late January it signed a joint venture with Shanghai Ruihua Group to build environment-friendly vehicles in Nanchang, with a total investment of Rmb1 billion.

Jiangxi Ayvip has also announced that its diesel-electric hybrid city bus project has been included in the national government’s new programme: ‘10-City with 1000-Auto’. The programme will offer subsidies to companies with promising technologies, and help them to industrialise their designs. The goal is to have 10 cities using 1,000 hybrid buses by 2010 – there will be 10,000 energy savers stopping at China’s bus stops within two years.

For the manufacturers, the future might be as golden as it is green. The domestic bus industry has dizzying economies of scale – around 21,900 (conventional) buses were sold in the month of October alone – so it is tempting to dream of great riches in capturing just a small share of the existing market.

Of course, only a few of the manufacturers are likely to win through. But the country at large stands to benefit. One thing is for sure: China certainly doesn’t intend to miss the hybrid electric bus.

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