Domestic Car Makers Rushing to Meet the New and Tougher Fuel Economy Rules
Domestic automakers in the country are rushing to build and sell more eco friendly vehicles as these manufacturers are trying to meet the tough fuel economy rules that will be released next year as part of China’s fight against pollution. But several of China’s smaller indigenous car makers are already struggling to make the upgrades that is needed to meet these tough rules that is to push more efficient energy use which is said to be made tougher every year until 2020.
Also a technology deficit is also facing bigger foreign automakers and the cost of developing and obtaining these new technologies is likely to speed up any consolidation of more than 80 registered manufacturers. Furthermore the government unveiled tougher penalties that is tied to the new fuel economy rules that will call out those who fail to make the grade that restricted production of non compliant car makers. an analyst for the International Council on Clean Transportation said that restricting production is a very severe penalty and Chinese car makers are already falling behind foreign firms in the technology thus the new rules are adding more pressure to these struggling domestic brands.
By early next year car makers in China will be required to achieve an average fuel economy of 6.9 liters per 100 kilometers in their product line up and by 2020 the target will be brought down to 5 liters per 100 kilometers. These means that every car maker needs to improve its fleet average fuel economy by a third in ten years from today’s level. Studies show that around 30 percent of car makers in China have already failed in meeting the suggested fuel economy target for 2013 and most of these were Chinese together with some foreign car makers is said to struggle to meet these new standards and is rushing to adopt the new energy technology.
But using new technologies are costly and are difficult to master without taking any risk, which push manufacturers to turn into more accessible but high impact technologies such as conventional gasoline electric hybrid the same technology Toyota uses in its Prius.