GM goes hybrid in China

It may not solve the air pollution problem all by itself, but GM (NYSE: GM) will begin to make hybrid cars in China in time for the Olympics.

But the No.1 US car company may have trouble selling the vehicles. According to Reuters "Demand for hybrids is negligible in China, where fuel economy figures little in consumers' purchasing decisions." With oil trading above $90 and China driving much of the global demand, that dynamic could change quickly.

The GM move seems to be a PR stunt as much as anything else. The automaker knows that putting out a hybrid in the world's second-largest car market will get it coverage as foreign press flood China for the 2008 Olympics. One can just see all of the US athletes being driven to and from the Games in their shiny new GM hybrids. Made in China. Driven in China.

But the fuel problem in the world's most populated country is severe. Last month, the government had to ration diesel and, at high prices, the Chinese government is paying a huge premium to keep its GDP rising by underwriting energy costs.

Perhaps some of the senior members of the Communist Party will be in hybrids next year as well.

Douglas A. McIntyre is an editor at 247wallst.com.

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