China Grants Green Light for 71 Fuel-Efficient Vehicles

Subsidies have been granted to 71 fuel-efficient automobile models as China drives ahead to promote vehicles that use less fuel to address pollution and to safeguard energy security, the country's top economic planner said on June 30.

The vehicles, which have an engine capacity of 1.6 liters or less, will be entitled to a 3,000-yuan (441 U.S. dollars) subsidy per car after they demonstrated they can save fuel consumption by 20 percent, the National Development and Reform Commission said in a statement.

Sixteen Chinese car makers, including BYD Automobile Ltd and Chongqing Changan Automobile Co, will produce the first batch of the vehicles, the NDRC said. More models that qualify for the subsidies will be included in the future, it said.

Auto analysts said the subsidies, which aim to popularize the more costly fuel-efficient vehicles, will enhance their price competitiveness and boost sales.

Shanghai General Motors said it has 12 models in the subsidy list, including Chevrolet Sail, the 1.2-liter Chevrolet Lova, Cruze 1.6MT and the new 1.6-liter turbo engine Buick Regal. The car maker said it would speed up producing new energy vehicles and cut fuel consumption of its models by another 15 percent by 2015.

Guangqi Honda has six models on the list while China's home-grown BYD Co, backed by billionaire Warren Buffett, said its F0 subcompact car is eligible for the subsidies.

Some car makers said they were not sure on what basis the subsidies would be given. An official from Changan Auto said the firm was not sure "whether the subsidies would be given in terms of production capacity or sales."

Despite the under-developed infrastructure for electric vehicles, such as battery-charging stations, China wants about 500,000 green vehicles including hybrids and electric cars on the roads by 2011.

The government has also said it would offer subsidies of as much as 60,000 yuan for plug-in hybrid and electric car makers.