BEIJING -- China will not become a net exporter of automotive parts anytime in the near future, Phil Murtaugh, CEO of General Motors China Group, told the Automotive News China Congress.
"The fact is, there are very few parts produced in China today that are globally competitive," Murtaugh said in response to a question. "China suppliers produce very high-quality parts, but it costs them a lot to do that."
In his prepared remarks, Murtaugh said China's environment "will not, must not, pay the price of economic growth."
"Every one of us is responsible for helping remedy" the impact of autos on China's environment, he said.
He cited several examples of that impact:
"Is it fair for those of us who come from countries that have already developed an entrenched car culture to tell the people of this country that they can't have what our own people have because of the long-term consequences, and because they came late to the party?" he asked rhetorically.
Murtaugh said GM is "a strong supporter of sustainable development." Five years ago Shanghai GM became the first automaker in China to produce vehicles with catalytic converters. GM was an early supporter of unleaded fuel in China.
"It's time to take the next step," he said. "We all should support an improvement in the overall quality of the fuel sold across the country to bring it into line with global standards."
Answering a question, he said in order to improve the fuels coming from China's refineries, "They have to basically scrap what's there and rebuild."
China's fuel-producing processes are based on outdated Soviet technology that yields fuel with high levels of olefins and paraffins. That fouls the latest emissions-control technologies. He admitted that he could be misinformed on some of the technical issues. But he called improving China's fuels "one of the most difficult issues to address."
The auto industry needs to introduce advanced environmental technologies, he said. It should work with government and academia to solve China's environmental problems. "We should begin to look beyond the internal combustion engine," he added.
China is a prime candidate for fuel cell vehicles, Murtaugh said.
It does not have a massive gasoline infrastructure in place. It has a supportive business community and an equally supportive government. It also has an advanced educational and scientific base that can help take fuel cells to the next level, he said.
Three years ago, GM's Pan Asia Technical Automotive Center joint venture in Shanghai introduced China's first fuel cell concept vehicle, the Buick GL8 minivan-based Phoenix.
But fuel cell technology, "is not close to commercialization," Murtaugh said. "It is absolutely unaffordable." Even if GM achieves cost-reducing technical breakthroughs, fuel cells then will need economies of scale to be commercially viable. Government assistance could be crucial to gaining those economies of scale, he said, implying that the Chinese government's support could be critical.