China is speeding up the industrialization of new energy vehicles and energy efficient automobiles as a way to offset pressure from booming auto capacity, which will hit 200 million by 2020, government officials said at the weekend.

Consumers evaluate the latest vehicles at an auto market in Zhengzhou, Henan province. [China Daily]

"The improvement of energy efficiency and emission reduction as well as the industrialization of new energy vehicles are very urgent for China's automobile industry, as the nation faces the big challenge of having more than 200 million vehicles on the road by 2020," said Wang Fuchang, deputy director-general of the equipment industry with the Ministry of Industry and Information Technology (MIIT).

"In the coming 10 years, China should attach great importance to the research and development of core technologies in green vehicles, aiming for a global lead in this field by 2020," Wang said at an automobile industry forum in Tianjin.

He also said that the nation plans to increase the market share of pure-electric and plug-in electric vehicles and enhance the competitiveness of automakers and parts producers in the energy-efficient auto sector over the next decade.

"The next five to 10 years are very crucial for the industrialization of the global new energy vehicle sector. China should seize the opportunity to lead the world," said Minister of Science and Technology Wan Gang.

"We are happy to see that China now has a head start in transitioning from research and development to industrialization in the electric vehicle sector."

He disclosed that the ministry is cooperating with MIIT to map out industry standards and regulations for new energy vehicles, especially electric vehicles.

Chen Bin, director of Industry Coordination for the National Development and Reform Commission, warned that the booming market last year had led to a potential overcapacity in production in the automobile industry, also adding pressure to the nation's surging auto capacity.

According to Liu Zhiquan, an official with the Ministry of Environmental Protection, about one-fifth of China's cities are suffering from serious air pollution, with vehicle emissions being the major cause.

Analysts said that development of green energy vehicles is the best way for China to reduce its oil imports, which exceeds 50 percent, as well as tackle environmental problems.

Last year, China's domestic automobile market surged 46 percent over the previous year, helping the country overtake the United States to become the world's biggest auto market.

Although the booming market started to cool off in the second quarter of this year, auto sales are still expected to surpass 16 million units in 2010.

"From a long-term perspective, China's automobile market will continue its robust growth, as there is increasing demand for smaller-sized fuel efficient cars and huge potential in third- and fourth-tier cities," said Feng Fei, director of the Research Department of Industrial Economy under the Development Research Center of the State Council.

He predicted in China's 2010 Blue Book of Automotive Industry that the demand for passenger vehicles in China will reach 25 million units in 2020 and 35 million units in 2030.