Asia's HOT Car Market Means Growing Fuel Needs

NEW DELHI, India Apr 29, 2006; Michael Casey reporting for the AP wrote that now is a good time to be selling cars in India. Sachin Kapoor, who sells General Motors cars at T & T Motors in New Delhi, says he can barely keep up with customers taking advantage of cheap bank loans to buy their first car or trade up to a newer model.

"Even middle and lower middle-class families are buying cars," he said. "As the Indian economy continues to grow, the demand for cars will only go up and up."

It's similar in China, where double-digit economic growth has lifted millions out of poverty.

But the skyrocketing number of new vehicles means more air pollution, traffic jams and a big spike in oil consumption. That has authorities searching for cheaper and cleaner alternatives.

Last year China introduced fuel efficiency standards for cars and sport utility vehicles and automobile taxes to promote smaller vehicles.

It also recently declared public transport a national priority and announced that ethanol, a plant-based fuel that is cleaner than gasoline, now represents 20 percent of all fuels sold.

India, which imports most of its oil, is also embracing alternative fuels. Gasoline at filling stations in about half the country must contain 5 percent ethanol, and a big investment is planned in jatropha, an otherwise useless bush that can produce a fuel to mix with diesel.

Public buses, trucks and three-wheelers in New Delhi, Bombay and other metropolises run on natural gas and the government is expanding the requirement to more cities.

New Delhi "looks a lot cleaner now and you can breathe a lot easier now," said M.S. Srinivasan, of India's Ministry of Petroleum and Natural Gas. "Today, my eyes don't water. We are able to walk along the road comfortably."

Annual vehicle production in India has increased by 20 percent each year since 2000, while China's has grown eight-fold in 10 years to 2.6 million, and it is poised to become the world's largest car producer by 2015, according to the Washington, D.C.-based Worldwatch Institute, an environmental and economic think tank.

The two countries are building thousands of miles of new roads. India is spending $45 billion to pave 31,000 miles of road by 2012.

"Every family would like to have a car," said Dongquan He, a transportation program officer with the nongovernment group The Energy Foundation in Beijing. But he says more is needed to promote environmentally friendly cars such as gasoline-electric hybrids, which are still too costly for most buyers.

China has introduced them on a small scale. Indian has not.

Toyota Motor Corp. expects to sell 3,000 of its Prius hybrid cars in China this year. General Motors Corp. and its Chinese partner, Shanghai Automotive Industry Corp., last year announced plans to make energy-efficient vehicles in China in 2008.

The agreement also calls for expanding their joint hybrid-bus program to a larger fleet to serve Shanghai as well as pursuing hybrid options for cars and hydrogen fuel cell technologies.

"As a company with a major stake in China, GM believes that we must focus on the industry of tomorrow," chairman Rick Wagoner said.