GUANGZHOU: Japan's Honda Motor Co is expected to soon start producing hybrid-powered cars for an oil-hungry China.

Honda's joint venture with Guangzhou Automobile Group in South China's Guangdong Province is considering making an Accord hybrid sedan, said Zeng Qinghong, executive vice-president of the venture.

"If costs of and demands for hybrid cars in China reach our requirements, we will start production soon," Zeng said.

He made the remarks yesterday at the opening of the seven-day Guangzhou International Motor Show. But he did not reveal specific plans for the production of the hybrid Accord.

General Motors, the world's No 1 automaker, and partner Shanghai Automotive Industry Corp signed a joint development and commercialization agreement on hybrid and fuel cell vehicles in China at the end of last month.

Toyota also clinched a deal with First Automotive Works Corp (FAW) in September to start to produce its Prius hybrid cars next year in Changchun, capital of Northeast China's Jilin Province.

Toyota will also introduce its hybrid engine technologies into FAW's own brand cars.

It is a pressing task to develop clean energy vehicles, such as hybrid cars, for China's auto industry as the nation is depending more heavily on oil imports as a result of its fast-growing economy.

However, there are many challenges that have to be overcome before realization of massive commercial production of hybrid cars, such as reducing costs and building the necessary infrastructure.

Zeng said the government should give subsidies to customers to lower the costs of using hybrid cars.

"Small cars that protect the environment will be the mainstream of the auto industry in China in the future," he said.

Earlier this month, Honda announced that it and Guangzhou Automobile will spend 2.2 billion yuan (US$265 million) to build a new plant for their joint venture in 2006. The new plant will have an annual production capacity of 120,000 cars.

The venture now has an annual capacity of 240,000 units and makes petrol-engined Accord sedans, Fit compact cars and Odyssey commercial wagons.

Editor: Olivia