Gasoline price hike fuels 'green revolution' by auto industry

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Last updated at: (Beijing Time) Wednesday, January 07, 2004

Gasoline price hike fuels 'green revolution' by auto industry

Both Chinese auto makers and consumers are putting unprecedented importance on environment-friendly and fuel-saving vehicles as gasoline prices continue to rise.

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Both Chinese auto makers and consumers are putting unprecedented importance on environment-friendly and fuel-saving vehicles as gasoline prices continue to rise.

The price of 93 octane gasoline rose from 3.02 yuan per liter to 3.20 yuan at the end of last year, compared to 2.32 yuan in 2000.

The fact that gasoline prices in China have grown by more than one-third in three years has forced car owners to pay more attention to fuel consumption. A vehicle fueled with 100 yuan of gasoline could run 100 km further three years ago than the current situation.

Nowadays, car buyers spend more time comparing fuel consumption when buying, said Huang Hao, market director of the Shanghai Mingliu Automobile Sales Company.

"So, we underline in red the fuel consumption on the price tag, a rare practice in the past," said Huang.

Official statistics show that private cars made up 21 percent of the national fleet in 1994, compared to 50 percent in 2002.

Miao Wei, general manger of Dongfeng Motor Corp, one of the country's three biggest auto makers, said gasoline prices will not slow auto sales in the short term. He said GDP was the key indicator behind market demand.

"But fuel consumption is the critical factor for buyers when considering the type of car," said Miao.

Based in central Hubei Province, Dongfeng Motor, which gained a reputation for manufacturing heavy trucks, has so far joined with France's PSA and Japan's Nissan to produce several types of cars and commercial vehicles with emission standards that meet "Euro II" requirements.

China's other auto giants, including First Automotive Works Corp., the Shanghai Automotive Industry Corp., as well as Beijing Hyundai, are increasing output of low-fuel-consumption cars.

Considering national energy security, the Chinese government has set a timetable for vehicles to meet emission requirements and is planning to issue a compulsory regulation on fuel consumption.

China became a net oil importer in 1993. Imported oil accounted for 7.6 percent of the volume consumed in the country in 1995 and 31 percent in 2000, a figure expected to rise to 60 percent in 2020.

Lars Hansson, environment professor at Sweden's Lund University, welcomed the new change in China.

It is impossible for a nation with the highest economic growth rate in the world not to increase use of cars, and developed countries have no right to prevent Chinese people from pursuing a better life, he said.

Thus, environment-friendly vehicles were the realistic and practical choice for China, he stressed.

China's auto output is expected to hit 8 million in 2010 and 12 million in 2020, ranking second largest auto manufacturer in the world, said Zhang Xiaoyu, president of the council of the China automotive engineering society.

In the next two decades, auto sales in China will rise by more than 10 percent annually, if GDP continues to grow at 7 percent a year, said Zhang.

"The green revolution by China's auto industry is of great significance to the global environment," said Hansson.

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