General Motors will pour five million dollars into a plug-in hybrid commercial van being developed by an Indiana firm, the automaker said Tuesday.

The IDEA van will be able to drive up to 40 miles (64 kilometers) on its electric battery before switching over to a hybrid gas-electric engine which offers a fuel economy of 36 miles per gallon (6.5 liters/100 km).

"It's an opportunity to bring more efficient, greener utility to the country's commercial and government fleets and to do it in a way that they save money," said Reuben Munger, chairman and chief executive officer of Bright Automotive.

Most light-duty commercial vans get fewer than 15 miles to the gallon (15.68 liters/100 km) and are driven an average of 25,000 miles (40,232 km) a year, Bright said. The IDEA would save the average customer about 1,500 gallons (5,678 liters) of fuel per year.

The IDEA is expected to hit US showrooms by 2014 and is also being aimed at the European market, Munger said in a conference call with reporters.

GM's investment will help Bright accelerate production of the IDEA, which stalled after financing dried up following the 2008 financial crisis, Munger said.

GM will also share its technology and the IDEA will run on a GM engine.

The light-duty commercial van market -- which includes government fleets and businesses such as cable and telephone companies, florists, and plumbers -- represents about 900,000 vehicle sales a year in the United States, Munger said.

Bright plans on building a plant with a production capacity of 50,000 vehicles in the United States.

"The European market is twice as large as here in the US and the average retail price of the vehicles are materially higher, as are gas prices so the economics work extremely well in Europe," said Michael Brylawski vice president of corporate strategy for Bright.

"But our core business plan is based around a 50,000 unit run-rate volume."

The IDEA is the first investment made by the newly formed General Motors Ventures LLC.

"Funding early-stage start-up companies is a new way of doing business at GM to accelerate the introduction of innovative technology to support our core automotive business and give us a competitive advantage," said Jon Lauckner, president of GM Ventures.

GM has not yet determined how the IDEA will fit into its product portfolio, he added.

earlier related report
General Motors China sales rise 22.2 percent in July
Shanghai (AFP) Aug 3, 2010 - General Motors said Tuesday its vehicle sales in China had grown 22.2 percent year-on-year in July, while rival Ford reported a 6.3 percent decline in monthly sales in the world's biggest auto market.

GM and its Chinese joint ventures sold 176,645 vehicles in July and sales for the January-July period totalled 1.39 million units, an increase of 44.5 percent from the same period in 2009, a statement from the company said.

The July sales were flat compared to June's level of 176,486 vehicles.

Meanwhile, US rival Ford said Tuesday it had sold just 18,255 units last month in China, compared with 19,486 units the same month last year.

Ford said its sales for the first seven months of the year were 170,053 units, up 38 percent from a year earlier, boosted by strong demand for the Ford Fiesta and Ford Focus.

China has proved a godsend for foreign carmakers as sales in developed countries slumped following the global financial crisis.

However, after overtaking the United States for the first time last year to become the world's biggest vehicle market, data shows that China's sales have started to slow in recent months as demand weakens.

The nation's auto sales in July totalled 1.06 million units, up 17.2 percent from a year earlier, but down 6.7 percent from the previous month, the official Shanghai Securities News reported Tuesday.

The newspaper cited figures from the China Automotive Technology and Research Centre, an industry association affiliated to China's state-owned assets watchdog.

The China Association of Automobile Manufacturers, another quasi-official industrial group, is due to release monthly sales figure next week.