An agreement between General Motors and the Shanghai Automotive Industry Corp (SAIC) look set to bring more hybrid cars to the Chinese market.

Under the agreement the two companies will jointly develop gasoline-electric hybrid vehicles, which emit fewer damaging emissions and have better fuel economy than conventional vehicles.

It is expected that the first vehicle available to the Chinese market will be based on the hybrid Saturn VUE sports-utility car that General Motors already plans to sell in the US next year.

"By working together, we can help take China one step closer to the era of sustainable transportation," said General Motors' chief executive Richard Wagoner.

"To make this happen, we need to bring down costs and build the necessary infrastructure - and the best way to do that is by business and government working together," added Mr Wagoner.

The Chinese automotive market is particularly attractive to overseas companies because of strong consumer demand. In the last 12 months, the country's sales rose by 28 per cent to total 472,468 vehicles.

It is hoped that the eco-friendly hybrid cars will be in full production by 2008.


Ÿ Adfero Ltd