Watching Japan rocket past our auto industry was bad enough, but is China poised to follow suit?
they have initiated new fuel economy standards for cars and trucks sold in China. The first phase of the standards went into effect this year and range from 38 miles per gallon for the lightest cars to 19 miles per gallon for heavier trucks. In 2008, the standards will increase to 43 miles per gallon and 21 miles per gallon, respectively. Because the Chinese standards apply to each individual vehicle, rather than a vehicle class average as in the United States, American automakers may struggle to sell their vehicles, especially oil thirsty trucks, in the Chinese market. China is not stopping with efficiency requirements. They are also purchasing hybrids from abroad for immediate use and developing their own hybrid and fuel cell designs and manufacturing capabilities for the future.
If this goes as promised, American automakers may lose their ability to effectively compete in China's market, but Chinese automakers, powered by huge domestic demand and government investment, might get very good at building very cheap cars very quickly. If they're also able to develop top technology, they'll be a real force. Meanwhile, Ford is licensing hybrid technology from Toyota, GM is basically waiting for imaginary fuel cells, and the Japanese makers are perfecting their homegrown engines.
We're falling behind. Again.
