China drafts strict fuel economy standards

The Chinese government has drafted stringent automotive fuel economy standards, which it said are designed to relieve the country’s reliance on imported oil. The new plan, which is undergoing an inter-agency approval process, requires Chinese automakers to improve their vehicles’ fuel economy an additional 18% by 2015. It would be implemented in 2010, but has already drawn mixed reactions from homegrown and global carmakers with local facilities, which will have to rethink their designs in order to meet the mandate. The average fuel economy of family vehicles in China is already higher than that in the U.S., the Chinese government said,, mainly because cars in China tend to be considerably smaller than those in the U.S. The details of China’s new fuel economy standards may favor domestic automakers at the expense of multinationals, several auto industry officials said, as the new rules call for the steepest increases in fuel economy as much as 26% for midsize and compact cars, market segments where multinationals are strong. Subcompacts, a market where domestic automakers are stronger, will be required to increase their gasoline mileage by as little as 9% compared with the existing standards, which took effect Jan. 1. (May 29, 2009)