According to the Automotive Resources Asia (ARA), an automotive market information company based in Beijing, it is estimated that the total number of registered vehicles operating on the roads across China reached 35 million units at the end of 2005. Besides, another 35 to 40 million vehicles will be added to China's roads over the next five to six years.

Currently, the number of global automakers building cars in China with their local joint venture partners is more than any other country in the world, including the United States, the world's largest car market.

In addition, more than two dozen domestic passenger car and commercial vehicle makers are operating in China, making China the most competitive automotive production base in the world.

Michael Laske, president of the AVL China Co Ltd, a power-train engineering company headquartered in Beijing, and chairman of the Green Diesel Initiative, said: "China currently finds itself at the centre of global attention for the automotive industry."

As China's automotive industry continues to surge forward, various challenges to the sector are becoming more readily apparent. Two of the more obvious concerns are the industry's impact on oil consumption, and its impact on the environment.

Besides, the way in which oil is being consumed is also changing.

It is estimated by the government that vehicles currently account for approximately 35 of all oil consumption in China every day.

The other 65 is consumed by a combination of other industries, including construction, marine, agriculture, and power generation.

However, it is estimated that by 2020, these percentages could be reversed, with the automotive sector occupying 60 to 65 of all oil consumption, and the other sectors combining to make up the remaining 35 to 40.

"China's rising vehicle population is not only going to affect China's future oil demand and supplies, but also the rest of the world," Laske said.

"China needs to concentrate on fuel conservation in the future, and policies based on fuel economy are now under discussion. Clearly the government now focuses on this issue," he said.

Vehicle exhaust emissions, in particular carbon dioxide emissions, are another concern for the automotive industry.

Carbon dioxide emissions are believed to cause damage to the earth's atmosphere, and contribute mostly to the global warming phenomenon.

Today, China is already one of the world's largest emitter of carbine dioxide after the United States, although most of the carbon dioxide emission from China is attributed to the burning of coal for industry.

Regardless, vehicle emissions are increasing at an aggressive rate in China, and without changes to its automotive energy strategy or technology, China will inevitably become the largest producer of carbon dioxide emissions worldwide.

Suggestions

For improving fuel economy and reducing exhaust emissions, the Green Diesel Initiative thinks it has a good solution.

Most of the growth in China's vehicle demand over the past five years has come in the passenger vehicle segment, as private consumers buy their own personal transportation.

This growth in the passenger vehicle segment is expected to continue for the next 10 to 15 years. Gasoline engines power more than 99  of all passenger vehicles sold in China, with less than one  powered by diesel or other fuels.

The Green Diesel Initiative estimates that if just 20  of all passenger vehicles sold in the next 15 years were powered by advanced diesel engines, it could save the country hundreds of millions of yuan in reduced oil consumption every year, and could significantly slow or flatten the rate of carbon dioxide emissions growth.

"Vehicles powered by modern diesel engines are typically 30 to 35 more fuel efficient than identical vehicles powered by gasoline engines, meaning they can travel 30 to 35 farther on a litre of fuel than a gasoline engine. This means the diesel vehicle owner makes fewer trips to the fuel pump, and thus saves more money," explains Laske.

Because modern diesels use less fuel to travel the same distance as gasoline engines, they also emit significantly lower carbon dioxide than gasoline engines. It also means that China would not have to import as much foreign oil to satisfy demand in the automotive sector.

European experience

In Europe, the popularity of diesel has been rising steadily for the past decade.

In 2000, about 25 of all new passenger vehicles sold in Europe were powered by diesel; by 2005, however, diesels accounted for 50 of all new vehicles sold. High fuel economy is the biggest reason for diesel's popularity in Europe, but there are also several other tangible factors.

Progress in diesel engine technology has made diesels quieter, smoother and more powerful than ever, because diesels have much more torque than gasoline engines of the same size.

As a result, diesels are both fun-to-drive and economical, which make them a fashionable option.

As Europe shifted to diesel engines, environmental scientists found that total carbon dioxide emission in Europe started to flatten out, even though the total number of vehicles on the road continued to increase.

It is believed that the more fuel efficient and advanced diesel engines contributed to these gains in emission reduction. China, for its part, as its industry continues to grow, might consider diesel as a means to reduce carbon dioxide emissions, improve fuel economy, and reduce dependence on imported oil.

Laske stressed, "Advanced diesel technology is probably the most viable and readily available motive solution for China's automotive industry today. It is a proven winner."

Profile

The Green Diesel Initiative is a group of automotive-related companies dedicated to China's goals of sustainable development and environmental protection through the promotion of the advantages of advanced diesel technology and high quality fuels.