Home » Business » Autotalk Special
Fuel-efficiency criteria to pinch auto subsidies
By Jin Jing |
August 22, 2011, Monday
|
Print Edition
Print Edition
CHINA may tighten the criteria under which carmakers receive subsidies for putting fuel-saving cars on the road.
Under the current program, begun in June 2010, carmakers receive 3,000 yuan (US$469) on each car sold with engine capacity of 1.6-liter or less and fuel efficiency of no more than 6.9 liters per 100 kilometers.
About 500 models now qualify under the scheme, but industry analysts estimate that about 70 percent of them wouldn't make the cut if the fuel-efficiency threshold were raised to 6.2 liters per 100 kilometers, as suggested by media reports.
The tighter standards would rule out the likes of the Hyundai Elantra, FAW-VW's Bora and most models made by China's home-grown car makers like BYD, Chery and Geely.
"Both car makers and dealers would have to share the extra cost generated by the subsidy adjustment, " said Chen Pengyang, an analyst from China International Capital Cooperation Ltd.
China's fund to finance the automakers' subsidy ran out of money at the end of June.
China Security Journal, citing unidentified officials from the Ministry of Industrial and Information Technology and the National Development and Reform Commission, reported recently that the fund with be replenished along with tighter criteria mandating at least 6.2 liter/per kilometer performance.
The report didn't say when the new subsidy standard would be unveiled.
If the new standard is to be enacted, models like 1.6-liter Nissan Tiida, 1.3-liter Honda Fit would still be qualified. That would also included Chinese branded models such as 1.0-liter Yueyue made by Jianghuai Automobile Co, 1.0-liter Hafei Lubao as well as 1.3-liter Lifan 320 compact sedan
Tighter standards are likely to hit domestic carmakers the hardest, Chen said.
"Joint venture companies could handle a stricter subsidy requirement for higher fuel efficiency because they have the engineering capability to adapt models, while China's domestic carmakers would be hurt by their weakness in technological skills," he noted.
China has been on a campaign to promote green in the world's largest auto market. With numbers of cars on the road soaring, more than half China's consumption of crude oil is now going into gas tanks.
"The top priority now is to reduce fuel consumption so that we can ease oil dependency and improve the nation's energy security," said independent auto analyst Li Yang.
"Imposing a higher standard would also prod domestic car makers into enhancing their engineering capabilities and improving their market competitiveness," he added.
Still, Xu Changming, director of the Information Resources Department at the State Information Center, told reporters that if the new standards were adopted this year, domestic carmakers like Chery, Geely and BYD would likely lose money because they will no longer be able to use the subsidy to offset price discounts.
Auto makers are required to give the subsidy back to consumers to help encouraging sales of those fuel efficient vehicles.
Under the current program, begun in June 2010, carmakers receive 3,000 yuan (US$469) on each car sold with engine capacity of 1.6-liter or less and fuel efficiency of no more than 6.9 liters per 100 kilometers.
About 500 models now qualify under the scheme, but industry analysts estimate that about 70 percent of them wouldn't make the cut if the fuel-efficiency threshold were raised to 6.2 liters per 100 kilometers, as suggested by media reports.
The tighter standards would rule out the likes of the Hyundai Elantra, FAW-VW's Bora and most models made by China's home-grown car makers like BYD, Chery and Geely.
"Both car makers and dealers would have to share the extra cost generated by the subsidy adjustment, " said Chen Pengyang, an analyst from China International Capital Cooperation Ltd.
China's fund to finance the automakers' subsidy ran out of money at the end of June.
China Security Journal, citing unidentified officials from the Ministry of Industrial and Information Technology and the National Development and Reform Commission, reported recently that the fund with be replenished along with tighter criteria mandating at least 6.2 liter/per kilometer performance.
The report didn't say when the new subsidy standard would be unveiled.
If the new standard is to be enacted, models like 1.6-liter Nissan Tiida, 1.3-liter Honda Fit would still be qualified. That would also included Chinese branded models such as 1.0-liter Yueyue made by Jianghuai Automobile Co, 1.0-liter Hafei Lubao as well as 1.3-liter Lifan 320 compact sedan
Tighter standards are likely to hit domestic carmakers the hardest, Chen said.
"Joint venture companies could handle a stricter subsidy requirement for higher fuel efficiency because they have the engineering capability to adapt models, while China's domestic carmakers would be hurt by their weakness in technological skills," he noted.
China has been on a campaign to promote green in the world's largest auto market. With numbers of cars on the road soaring, more than half China's consumption of crude oil is now going into gas tanks.
"The top priority now is to reduce fuel consumption so that we can ease oil dependency and improve the nation's energy security," said independent auto analyst Li Yang.
"Imposing a higher standard would also prod domestic car makers into enhancing their engineering capabilities and improving their market competitiveness," he added.
Still, Xu Changming, director of the Information Resources Department at the State Information Center, told reporters that if the new standards were adopted this year, domestic carmakers like Chery, Geely and BYD would likely lose money because they will no longer be able to use the subsidy to offset price discounts.
Auto makers are required to give the subsidy back to consumers to help encouraging sales of those fuel efficient vehicles.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
