NDRC: to sell 4 million fuel-efficient

　　Yesterday, National Development and Reform Commission (NDRC) announced Implementation Notice (below referred to the notice) on Issue of Fuel-efficient Vehicles (passenger vehicles with a displacement of 1.6 liters and below) Belong to Energy-saving Products Benefit Consumers Projects. According to the notice, sales of fuel-efficient vehicles could reach more than 4 million units by 2012 stimulated by financial subsidies for fuel-efficient vehicles and consumption of fuel-efficient vehicles can reach more than 400 billion yuan. However, industry people still doubt whether it can meet expectations.

　　On June 1, Ministry of Finance, National Development and Reform Commission, and Ministry of Industry and Information Technology jointly issued the notice, and specifically integrated engine displacement of 1.6 liters and below, gasoline and diesel passenger vehicles (including hybrid and dual-fuel vehicles) whose integrated operating condition of fuel consumption are 20% lower than the current standard into project of the energy-saving products that benefit consumers. In order to conduct a nationwide promotion, Chinese government will offer consumers 3,000 yuan subsidy per unit when they buy fuel-efficient cars, and the subsidy should be given by the manufacturers during the sales.

　　Considering that subsidies for buying fuel-efficient cars are only 3,000 yuan, which is far less than the subsidies for new energy vehicles (50000 to 60000 per unit), the industry widely thought that the measure is more symbolic than practical significance, and will have little influence on promoting sales of fuel-efficient vehicles. However, yesterday’s announcement showed that relevant departments think highly of the stimulation effect of the subsidies. National Development and Reform Commission estimated sales of fuel-efficient vehicles could reach more than 4 million units by 2012 stimulated by financial subsidies for fuel-efficient vehicles and consumption of fuel-efficient vehicles can reach more than 400 billion yuan. Meanwhile, it can save 750 million liter of gasoline and reduce by 3.3 million ton of carbon dioxide. This also means sales of fuel-efficient vehicles can reach more than 1.3 million units per year in the next three years, accounting for about 15% to 20% of China's current annual passenger vehicle sales.

　　Industry people worry that production cost of hybrid vehicles saving more than 20% of energy is high, for example, price of Prius is double than gasoline vehicles at the same level. As a result, subsidy of 3,000 RMB per unit has little impact on promoting sales of fuel-efficient vehicles. Other fuel-efficient vehicles that can reach requirement of subsidy standards are not much so practical effect remains to be seen in the future.

　　However, technical experts at some car enterprises read the new policy from the perspective of the technology improvement. After all, wide promotion of new energy vehicles still has a long way to go, and to improve the existing gasoline and diesel vehicles technologies is more realistic.

　　Additionally, financial subsidies will be extended to energy efficient motors. National Development and Reform Commission estimated the subsidies are supposed to increase share of China’s efficient motor market from less than 5% to 30% in 1 to 2 years while save 3.5 billion kwh annually. (Translator: Qinghua Wade)

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