BIZCHINA> Top Biz News
Obama vehicle deal 'positive' for nation
By Li Fangfang (China Daily)
Updated: 2009-05-21 08:18

US President Barack Obama's tough new standards for automobile emissions will raise the barrier for Chinese vehicles entering the US market, but it could benefit China's automobile manufacturing industry in the long run, analysts said.

"Obama's automobile emission deal enhances the difficulty for Chinese auto manufacturers to export their vehicles to the US market, a highly-matured market Chinese players are dreaming of, as it's even harder for Chinese vehicles to meet the new and stricter emission requirements," said Zhong Shi, an independent auto analyst.

However, the barrier will boost Chinese manufacturers' push to develop greener cars, which is expected to eventually benefit the domestic industry.

Related readings:
Obama vehicle deal 'positive' for nation Obama to unveil most aggressive auto fuel standards
Obama vehicle deal 'positive' for nation China to subsidize use of energy-efficient vehicles
Obama vehicle deal 'positive' for nation China to subsidize old-for-new consumption
Obama vehicle deal 'positive' for nation Greener cars get cash infusion

The White House on Tuesday released a national auto emission requirement for cars and trucks to lower their average energy consumption to 15 km per liter with a 30 percent emission reduction target by 2016.

The standard will make US drivers pay an extra $1,300 per vehicle.

Currently, the US market is still not an auto export destination for China.

Chinese automaker BYD Co, which launched the world's first commercial dual-mode electric car last December, has said it plans to start selling cars in the United States in 2001.

The Shenzhen-based company could be the Chinese firm that benefits the most from Obama's emission limits.

Its aggressiveness in developing green cars has won support from Warren Buffett. MidAmerican Energy Holdings Co, a unit of Buffett's Berkshire Hathaway Inc, bought a 9.9 percent stake in BYD for HK$1.8 billion last September amid the financial crisis in the United States.

Industry observers have called upon the Chinese government to increase support to green car development.

"China should learn from the US experience that we should pay more attention to energy efficiency when developing our own automobile industry," said Hui Yumei, an analyst with automobile market research company Sinotrust.

Hui said that China should start the extensive manufacture of energy-efficient vehicles with low-emission as early as possible. "We are lucky that the Chinese government has realized the importance of the issue and has begun to take active action."

Minister of Science and Technology Wan Gang said earlier this month that China plans to have 60,000 energy-efficient or new energy vehicles across the nation in 2012, with hybrid-powered automobiles accounting for more than 95 percent of the total.

The government has approved the manufacture of ten types of new energy vehicles.

Moreover, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Industry and Information Technology have together with the Ministry of Finance started the test of new energy vehicles for public transportation in 13 Chinese cities, in a bid to improve the use of new energy vehicles.

(For more biz stories, please visit Industries)