China's fuel economy strictures could hurt small auto players

ERJ staff report (BC)

Beijing – China imposed long-debated stringent fuel economy standards on 20 March, report Fang Yan and Norihiko Shirouzu of Reuters.

This is expected to make life tougher for cash-strapped small domestic brands that are already struggling amid a slowdown of the world's biggest auto market.

The rules, jointly issued by five government bodies including the National Development and Reform Commission, would cut passenger cars' average fuel consumption to 6.9 litres per 100 kilometres by 2015 and down further to 5.0 liters by 2020.

"That's going to be tough for everyone, especially those small players as they will have to use more fuel-efficient engines and invest in hybrid technologies," Yale Zhang, head of Shanghai-based industry consultancy Automotive Foresight is reported as having said.

China's latest passenger car fuel consumption data were not immediately available to Reuters. They stood at 7.8 litres per 100 kilometres in 2009 and 8.2 litres in 2008, said John Zeng, Asia Pacific director of consultancy LMC Automotive.

The new rules come at a time when environmental complaints have sparked unrest and even riots in some parts of the country.

Chinese Premier Li Keqiang pledged on Sunday that his government would show even greater resolve in tackling China's pollution crisis.

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