Peter Pang, vice-president of Bosch (China) Investment Limited, disclosed in Shanghai earlier this week that Bosch has reached an agreement with German auto giant Volkswagen to produce the cars.

Bosch has decided to set up an auto research and development center in China to promote the application of diesel-related auto technology and expand its auto parts production in the country, said Pang.

Other car makers in China, including joint ventures with American investment, have also indicated a keen interest in making diesel cars.

Pang said that China's stringent environmental protection policy makes the environmentally-friendly diesel cars more attractive in China.

Diesel cars, trucks and buses are expected to dominate the auto market in the future as they have in the European market, Pang noted.

He went on to say that diesel cars in Europe accounted for 40 percent of the car market in 2002 from less than 15 percent in 1991 as diesel engines consume less fuel and release less carbon dioxide.

Bosch has invested a total of 600 million US dollars in China with nearly 10,000 employees.

(Xinhua News Agency April 24, 2003)