New vehicle fuel-efficiency regulations are tipped to save the country 80 million tonnes of crude by 2020 Chinese drivers' passion for bigger cars is draining too much of the country's oil pool and measures to boost all vehicles' fuel efficiency would save 80 million tonnes of crude over the next 15 years, according to a state think-tank. 'Cars on the market are skewed toward those with engines that are too big,' said Feng Fei, director general of the industrial economics research department of the State Council's Development Research Centre. 'This implies that while the total number of cars on the road is not that big, the crude consumption is huge ... this must be corrected.' He was speaking at the second China Automotive Industry Roundtable organised by the Economist. Sales of cars with engines smaller than 1.3 litres accounted for only 26 per cent of total sales last year, and the average car on China's roads is 15 to 20 per cent less efficient than the international level, Mr Feng added. Shanghai Automotive Trade Association vice-chairman Tang Weiyan said many Chinese consumers think of their cars more as a status symbol than as a transportation tool. Mr Feng said the government's mandatory automobile fuel efficiency regulations to be phased in from the start of July aimed to reduce fuel consumption by 10 per cent. This policy alone is estimated to save 80 million tonnes of crude oil from this year until 2020. The saving would equate to 65 per cent of China's total crude oil imports last year. Total vehicle contribution toward China's oil consumption is estimated to rise from just fewer than 40 per cent to some 60 per cent by 2020, while dependence on foreign oil will rise from 41 per cent last year to 60 per cent by 2020. To achieve the government's fuel conservation objective, a taxation policy - such as a fuel tax - should also play a key role, Mr Feng said. The long-awaited tax, to be collected by the central government as a means to promote fuel economy, eventually will replace road taxes that are collected by local governments. But political wrangling between the central and local governments over how to allocate revenues from such a fuel tax meant that its imposition this year was unlikely, Mr Tang said. 'There are agricultural tractors that also consume diesel. As they do not pay road taxes, should they be given a rebate?' he added. Mr Tang, a former director of Shanghai Automotive Industry Group and now a director of the group's non-car business, also said he believed the planned listing of Shanghai Automotive Industry Holdings (SAIH) will definitely take place this year after the latter acquires Britain's MG Rover. Ernst & Young head of Automotive Europe Steven Blackman said the likelihood of more mainland car makers making acquisitions abroad is a 'question of motive, strategy and time scale for growth'. 'Some companies in China are in a hurry,' he said. 'Over the next few years there will likely be considerable interest for Chinese companies to consider acquisition as a major part of their strategy,' he said, adding these firms have not been as patient as their Japanese rivals. But he warned that while acquisition can speed up development, it presents a major risk for companies.