CHINA'S auto industry has shown that environmental protection is at the top of its priorities with the introduction of tougher emission standards for new cars.
Since the beginning of July, all new vehicles sold across the nation must meet the latest China III standards, equivalent to Euro III regulations applied in the European Union.
And by improving engineering capability in emission technology, Chinese car makers will also find it easier to compete in the global market.
Beijing, which pledged to host a "green" Olympic Games this August, was the first city in China to apply the new regulations in 2006. The government announced last year that it would apply the standards nationwide from July 1 this year, giving a year's grace for domestic car makers to update their engines.
Analysts estimate that cars meeting the new standards will emit 30 percent less carbon dioxide than older cars produced under previous regulations, equivalent to Euro II rules.
And after having been given a year to comply, most domestic car makers have said they don't expect a major impact on car sales. Many older models have been withdrawn from the market.
Dealers offered discounts to boost sales of the threatened models before the deadline, exploiting the last chance to reduce inventory. Others registered the vehicles in advance and offered them for sale on the used-car market.
Model upgrades
Joint ventures including Shanghai GM Co Ltd, Guangzhou Toyota Motor Co Ltd, and Nissan's joint venture Dongfeng Motor Co Ltd have all upgraded their models to meet the new standards.
Chinese car makers including Chery Auto, Brilliance Auto and BYD Auto have also met the eco-friendly regulations.
Commercial vehicle makers have raised prices by up to 10 percent to cover the cost of developing new exhaust systems and engines.
"Amid soaring costs for raw materials, it's hard for auto makers to absorb the cost of upgrading their technology," said Jia Xinguang, an analyst with China's Association of Automobile Manufacturers.
Nanjing Iveco is scheduled to launch a new light commercial vehicle, PowerDaily, which will be powered by an F1C engine that could meet the new emission standards.
The engine features Bosch's second-generation common-rail fuel-injection system, designed to reduce fuel consumption by 10 percent.
But the most basic model of the PowerDaily will cost 20,000 yuan (US$2,900) more than previous models, Nanjing Iveco has said.
Sinotruk (China National Heavy Duty Truck Group Corp), China's top truck maker, has also developed a 12-liter common-rail fuel-injected engine that could meet the new standards.
The company has raised prices by an average of 30,000 yuan across its complete line of trucks, said Sinotruck's public relations department.
Rising cost
"Compared with passenger cars, commercial vehicle makers have less risk of losing sales if they increase prices because market competition is less intense," said Rao Da, secretary general of China's Passenger Car Association.
"They were forced to increase prices to offset the rising cost of raw materials," he said.
Makers of pickups and minibuses would be affected most by rising costs because of narrow profit margins, he said.
The commercial vehicle market faces a possible sales slump in the second half of the year because buyers rushed to buy older models before the price rise.
"In the long term, the truck market will continue to grow although it may slump in the next few months," said Eric Labat, president of Volvo Trucks China.
He also noted that the higher emission standards would give foreign commercial vehicle makers a more competitive edge against domestic players, because overseas companies have already developed the technology to make more efficient engines.
"All regulations that help the environment and safety are good for us," the president added.
How China developed emission standards
Vehicle emissions include carbon monoxide, hydrocarbons and nitrogen oxide. China's emission standards have been revised four times since 2000.
China I
China's first generation of standards was implemented in 2000, and are equivalent to the Euro I standard.
China II
China applied the second generation of motor emission standards nationwide in 2004. The standard, equivalent to Euro II, reduced carbon monoxide emissions by 30 percent and hydrocarbons by 55.8 percent compared to earlier regulations.
Major cities acted much earlier, with Beijing enforcing China II standards in 2002, and Shanghai in March 2003 as a trial operation.
China III
China introduced new motor vehicle emission standards in July 2007, which further lower exhaust wastes by nearly 30 percent on average.
The new standards, equivalent to Euro III standards, limit sulfur dioxide to a maximum 150 ppm (parts per million).
Car makers must also install an on-board diagnostics system to monitor gas emissions. The new standard was approved by the State Environmental Protection Administration in April 2005.
China IV
China plans to introduce the updated emission standards nationwide by 2010, but Beijing began to enforce the stricter rules in March 2008 as part of its commitment to create a greener Olympic Games. Since then, all new vehicles sold in Beijing must meet China IV standards.
The nation also plans to introduce a revised lead-free gas standard at the end of 2009, which will halt sales of gas with sulfur levels of above 500 ppm.
Source: Shanghai Daily