The 40b yuan cost of new emission rule
Upgrade may force small carmakers out of business as Beijing becomes the first mainland city to ban registration of non-compliant vehicles
Stringent new emission standards that will be imposed on mainland carmakers from March 1 may cost the industry about 40 billion yuan (HK$49.28 billion), but well-prepared manufacturers say that for them, it is as much about opportunity as extra costs.
From the beginning of next month, Beijing will become the first city in the world's largest car market to ban registration of petrol vehicles that fall below the new National V emission standard.
Earlier this month, the State Council said the new requirement would be extended to the whole nation by 2017.
The undertaking came after various parts of northern China were blanketed in thick smog that prompted renewed calls for the adoption of cleaner fuel and vehicles.
Copied directly from Euro V emission standards, the new standard requires that the sulphur content of fuel should be no more than 10 parts per million (ppm), five times more stringent than the National IV standard of 50 ppm and 15 times the National III standard of 150 ppm, which are still widely followed at present.
While the technology required for the upgrade posed few challenges to carmakers, especially European and Japanese manufacturers that have long been under stringent emission controls at home, analysts said the extra costs involved, estimated at 2,000 yuan per car, would pose a bigger burden for local brands than their foreign counterparts.