The world’s biggest automobile market is suffering financially, and new Chinese fuel economy regulations could be both good and bad.
The small-car market in China really isn’t all that bad regarding fuel efficiency, and averaged 30mpg in 2009. By comparison, the US only just reached an all-time high in fuel economy, 23.8mpg in 2012.
Much like CAFE regulations here in the US, set on reducing fuel consumption and carbon dioxide emissions, new Chinese fuel economy regulations are set to take effect in the next couple of years.
The new regulations will require automakers to manufacture vehicles averaging 34mpg by 2015. by 2020, that requirement will be upped to 47mpg. Compared to the US CAFE regulations, these new Chinese fuel economy regulations are extremely optimistic.
The biggest problem will most likely be smaller automakers who are already struggling to make ends meet. In order to meet with the stricter regulations, they’ll have to invest heavily in better engine and hybrid technology. Many of these smaller automakers will likely be forced out.
“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,” said Yale Zhang, head of Automotive Foresight in Shanghai.