AT the World Expo 2010 Shanghai, the joint pavilion of General Motors and its Chinese partner Shanghai Automotive Industry Corp is proving to be one of the most popular of industrial showcases.

Every day, visitors from all over the world stand in line for up to three hours to get into the auto pavilion. They are anxious to see the cars of the future and how they will change the way people drive.

For businesses, the pavilion offers a sneak preview of future opportunities evolving in the fields of zero-emissions and traffic control.

US-based General Motors exhibited three EN-V concept cars. The two-wheel vacuum cleaner-shaped model runs only on electricity generated by lithium-ion batteries and is also equipped with advanced features, including a global positioning system, vehicle-to-vehicle communications and distance-sensing technologies.

The concept Car Yez, previewed by SAIC, showcased a vehicle that can absorb carbon dioxide and water molecules in the air and, like a leaf, convert them into power through a series of chemical reactions.

The auto pavilion underscores the world's pursuit of low-carbon technologies aimed at addressing the problems of urban pollution and energy shortages. Big cities such as Shanghai, with fast-expanding vehicle numbers, are facing increased pressure to develop fuel-saving, emission-free alternatives.

Shanghai is seizing on the sea change to help restructure its industrial base and become a world leader in advanced new technologies. Its blueprint for change targets nine industries, including new industrial materials, alternative-energy vehicles, information technologies and biological pharmaceuticals.

"In an attempt to lift manufacturing capability and speed up economic restructuring, it's necessary to improve the competitiveness of the manufacturing sector and promote industry upgrading," Shanghai Mayor Han Zheng said.

Last year, China surpassed the United States as the world's largest auto market, with sales topping 13.6 million units. That was a 46 percent surge from a year earlier.

Shanghai was among the first five cities nationwide to offer national subsidies for the purchase of fuel-efficient vehicles. People who buy cars that save 20 percent on fuel consumption are eligible to receive 3,000 yuan (US$441) in financial aid. The highest subsidy of 60,000 yuan is for cars that run solely on electricity.

According to a draft policy for promoting green vehicles in Shanghai, the city is planning to offer an extra 20,000 yuan to those who buy a plug-in hybrid and 50,000 yuan to those buying electric cars, Liu Jianhua, head of the city's new-energy promotion office, said recently.

The Shanghai strategy, in which after-sale servicing to green cars and support for battery-leasing businesses are part of the incentive package, differs from similar subsidy programs in the cities of Shenzhen and Changchun.

Companies developing new technologies are also expected to enjoy favorable tax breaks and low-interest loans.

Liu said the measures are part of the Shanghai government's efforts to encourage production capacity of 100,000 green vehicles by 2012, of which 60,000 units will be passenger cars. That will push the annual output value of the new-energy car industry to 30 billion yuan.

The city is targeting the production of 20,000 electric cars in 2012, with 25,000 charging poles and nearly 50 charging stations, in cooperation with State Grid Corp.

The proposal has been submitted to the central government and is expected to win approval in the next few months, Liu added.

To attract consumers to new-energy vehicles and get a jump on the market, all of the city's major auto makers, including SAIC and its ventures with GM and Volkswagen, are trying to accelerate development of new green models.

SAIC Motor Corp, the nation's biggest auto maker, said it is focusing on hybrid cars and electric vehicles.

According to its green-car blueprint, SAIC's semi-hybrid version of the Roewe 750 sedan will hit the market this year. The car can reduce fuel consumption by 20 percent compared with existing gasoline-powered engines.

By 2012, the Roewe 550 plug-in full hybrid, using 50 percent less gasoline, will be introduced, followed by a fully electric car.

Within five years, SAIC plans to increase its market share in the green car segment to 20 percent, the same proportion it now enjoys in the gasoline-powered market, said Hu Maoyuan, chairman of SAIC.

The car maker has provided nearly 1,000 green vehicles to the World Expo, including hybrids, electric vehicles, fuel-cell cars and vehicles powered by super-capacitors.

Early this year, the car maker invested 2 billion yuan to set up a new subsidiary for developing fuel-efficient, lower-emission vehicles. A group of 200 engineers is working on core spare parts for both electric and hybrid vehicles. The development of greener commercial vehicles is also under way.

The city's ambitions to develop green technologies haven't gone unnoticed by foreign investors.

Shanghai GM, which has already introduced the Buick LaCrosse Eco-Hybrid and Cadillac Escalade Hybrid, said additional hybrids and vehicles powered by electricity will be rolled out over the next five years.

The auto maker will unveil its Chevrolet New Sail electric vehicle prototype this year. In 2011, the new Buick LaCrosse Hybrid, which will have 20 percent better fuel economy than the standard model, will be available.

Its foreign parent, General Motors, will also start exporting its first electric car, the Chevrolet Volt, to China, making the country among the first recipients of the vehicles outside the United States. The Volt will be able to run solely on electricity for up to 60 kilometers. Its 1.4-liter on-board engine will give the Volt a maximum driving range of more than 480 kilometers.

Last week, GM also announced it would team up with SAIC to jointly develop other fuel-efficient technologies, including small-displacement gasoline engines and new front-wheel-drive transmissions.

Sino-German venture Shanghai Volkswagen has introduced turbo technologies and double clutch gearboxes in domestic production, which could also help reduce fuel consumption and carbon emissions significantly.

The car maker said it would invest more in research of new-energy vehicles in future to meet rising market demand.

The car makers' ambitions are underpinned by auto parts suppliers, such as Delphi, Vistoen and Magna, also retooling to address the green revolution.

Still, the auto makers face some marketing challenges in selling green cars to the public. For one thing, the prices are higher. For another, the infrastructure needed to recharge hybrid and electric cars remains underdeveloped.

Liu from the new-energy promotion department confirmed that no pure electric cars or plug-in hybrids have been sold since the national subsidy took effect in June.

"Sales of the cars subject to the highest subsidies have not started yet," he said.

BYD's F3DM plug-in hybrid is now sold only within its home market in Shenzhen. Company officials said marketing in Shanghai is expected to begin next month. Delivery waiting periods may be as long as four months.

Liu cited the need for uniform standards on car-charging equipment in order to promote sales of hybrid and electric cars. He estimated it may take up to another three years to develop preliminary industry standards, and until then, many consumers will be wary about buying green vehicles.

Still, the concept of new-energy vehicles is beginning to sweep across the globe, and Chinese consumers are showing more interest in the new technologies than their counterparts in many other countries.

A survey of 606 auto buyers in Shanghai found that 75 percent of respondents said they intend to buy a green car within three years, according to a report from research firm Ipsos.

In another poll of 1,478 vehicle owners and potential buyers nationwide, the same proportion expressed buying interest. They cited low operational costs and environmental benefits as their reasons, according to Nielsen Co.

"The electric vehicle is only in its infancy, but Chinese customers are already highly aware of it," said Jia Zhuang, director of consumer research at the Nielsen Co China.