US carmaker General Motors said yesterday it will open a research lab in Shanghai and work with its Chinese partner SAIC Motor Corp to develop cars powered by alternative fuels for the world's No 2 vehicle market.

The GM Center for Advanced Science & Research, to be part of a new $250million GM campus in Shanghai, will look into developing alternative-fuel cars, including plug-in hybrids, bio-fuel and fuel-cell vehicles, Rick Wagoner, the group's chief executive officer, said at a press conference in Beijing.

The first phase of construction will be completed late next year, according to Wagoner. The center is expected to employ 1,500 engineers and scientists when fully staffed.

This plan will "accelerate research in the areas of energy-efficient and environmentally friendly automotive technologies, as well as alternative fuel pathways that are socially responsible, economically viable, environmentally sustainable, and technologically feasible", he said.

"We see China as being among the first markets and production sites for alternative propulsion systems - including the new flexible fuel, plug-in type of electric vehicles currently under development by GM."

SAIC President Chen Hong said the firm's production of electric-fuel hybrid vehicles under its own and GM brands and will reach 10,000 units by 2010.

The plan comes as fuel prices in China are expected to increase sharply following hikes in world crude prices and a widely anticipated fuel tax next year.

Many Chinese brands, including Chery, Geely and Chang'an, are also developing alternative-fuel vehicles.

Separately, GM and SAIC will jointly offer a $5 million grant in the next five years to research clean energy with Tsinghua University, China's premier research institution based in Beijing, Wagoner said.

GM, one of the top two market leaders along with Germany's Volkswagen, said its China sales grew by 17.2 percent to 753,686 units in the first three quarters of this year.

Meanwhile, sales of all China-made vehicles surged by almost a quarter to 6.46 million units, according to industry data.

Wagoner said China will overtake the United States as the world's biggest vehicle market in the next decade.

(China Daily October 30, 2007)