China to Punish Automakers Who Don't Meet Fuel Targets in 2015

Oct 16, 2014 11:30 AM EDT | Matt Mercuro

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China said Thursday that it will punish automakers by restricting their production and publicly naming them if they fail to meet fuel consumption requirements on passenger vehicles set for 2015.

Measures outlined for offenders of the fuel economy rules reflect Beijing's latest effort to fight pollution and promote more efficient use of energy, according to Reuters.

They are also likely to push automakers, both foreign and Chinese, to embrace more cutting-edge technology like gasoline-electric hybrids and all-electric vehicles.

China's fuel economy rules, as tough as those to be enforced in the U.S., Japan, and Europe, involve a fleet-wide corporate average target of 6.9 litres per 100km in 2015 and 5.0 litres in 2020.

The rules take effect on Nov. 1.

China will also publicly name automakers who don't meet the 2015 target and will ban the production of new models that don't meet fuel economy targets, which will be determined by a special weight-based formula.

The government will also reject all expansion plans by offenders, who will be required to submit improvements plans, according to Reuters.

James Chao, director of IHS Automotive for the Asia-Pacific region, said the measures for 2015 "may not matter in a practical sense", because most automakers are projected to be able to comply with the requirements.

If similar punitive measures were to be enforced in connection with targets for 2020, "it could have a very significant effect, given that few (makers) ... are projected to be able to comply on a corporate average fuel efficiency basis," Chao said, according to Reuters.

The rules were published by five government agencies including the Ministry of Industry and Information Technology (MIIT).

China has already taken a number of steps to fight pollution, including restricting car sales in major cities and providing incentives for selling electric vehicles. The latest measures would put further pressure on carmakers.

In 2013, 85 car manufactures in China measured their corporate-average fuel consumption, and about 30 percent of them, mostly domestic brands, failed to meet their annual target for 2013, according to results published by MIIT earlier this year.

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