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Dongfeng Motor Corporation, one of China's largest auto makers, has completed its initial research of using hydrous ethanol in automobiles.

The new technology could produce combustible gas, mainly hydrogen, from hydrous ethanol that contained 65 percent ethanol. The present ethanol-fueled vehicles needed pure ethanol blended with gas, the China Association of Automobile Manufacturers said.

Experts said producing 65 percent ethanol could save up to 60 percent of energy compared with producing the same amount of pure ethanol, as dehydration was energy-consuming.

The use of hydrous ethanol, unlike some synthetic fuels that required adapted engines, only needed an additional device to be fixed on present engines. Thus, it was more likely to be accepted by consumers.

The company planned to set up an ethanol-fueled car production plant by the end of 2008. This included a design and test center, as well as an assembly plant for ethanol engines.

The plant was expected to produce a small amount of ethanol cars by year-end.