Murray would not say what the production volume will be, but demand for hybrids in China is tiny. Hybrids use gasoline or diesel engines along with one or more electric motors to power the wheels.

The Toyota Prius is the only hybrid assembled in China. Assembly from kits began in December 2005. Toyota sold only 2,000 in 2006.

Despite the small sales, GM doesn’t "want to be lagging behind Toyota," says Harry Zhao, China powertrain analyst for CSM Worldwide. "They want to prove to the Chinese customers and government that they have" hybrid technology.

CSM forecasts that only 14,000 hybrid powertrains annually will be produced in China by 2013.

The biggest barrier to hybrid sales in China is cost, Zhao says. Government incentives that reduce the cost would boost hybrid sales, he adds.

GM China’s hybrid model will carry the automaker’s four-cylinder Ecotec engine, which is already produced in China, Murray says. In the United States, adding hybrid technology to the Ecotec engine adds $2,000 (14,816 yuan) per car, he says.

GM sources parts such as the castings and pistons for that engine locally, says Michael Bly, GM engineering director for hybrid vehicle integration and controls. It imports the electric motor, the power inverter module and the battery for the hybrid powertrain. The software that makes the engine, transmission and battery work together is produced by GM, Bly says.

As for worries about intellectual-property theft, he says: "It’s more than just the manufacture of individual components. It’s how you execute it."

Many other automakers in China are planning to launch hybrid models in the next few years. Among them are Shanghai Automotive Industry Corp., which partners with GM in China; Chery Automobile Co.; Ford partner Chongqing Changan Automobile Co.; Volkswagen AG; and Guangzhou Automobile Industry Group.