China's auto industry has shown that environmental protection is at the top of its priorities with the introduction of tougher emission standards for new cars.

Since the beginning of July, all new vehicles sold across the nation must meet the latest China III standards, equivalent to Euro III regulations applied in the European Union.

And by improving engineering capability in emission technology, Chinese car makers will also find it easier to compete in the global market.

Beijing, which pledged to host a "green" Olympic Games this August, was the first city in China to apply the new regulations in 2006. The government announced last year that it would apply the standards nationwide from July 1 this year, giving a year's grace for domestic car makers to update their engines.

Analysts estimate that cars meeting the new standards will emit 30 percent less carbon dioxide than older cars produced under previous regulations, equivalent to Euro II rules.

And after having been given a year to comply, most domestic car makers have said they don't expect a major impact on car sales. Many older models have been withdrawn from the market.

Dealers offered discounts to boost sales of the threatened models before the deadline, exploiting the last chance to reduce inventory. Others registered the vehicles in advance and offered them for sale on the used-car market.

Model upgrades

Joint ventures including Shanghai GM Co Ltd, Guangzhou Toyota Motor Co Ltd, and Nissan's joint venture Dongfeng Motor Co Ltd have all upgraded their models to meet the new standards.

Chinese car makers including Chery Auto, Brilliance Auto and BYD Auto have also met the eco-friendly regulations.

Commercial vehicle makers have raised prices by up to 10 percent to cover the cost of developing new exhaust systems and engines.

"Amid soaring costs for raw materials, it's hard for auto makers to absorb the cost of upgrading their technology," said Jia Xinguang, an analyst with China's Association of Automobile Manufacturers.

Nanjing Iveco is scheduled to launch a new light commercial vehicle, PowerDaily, which will be powered by an F1C engine that could meet the new emission standards.

The engine features Bosch's second-generation common-rail fuel-injection system, designed to reduce fuel consumption by 10 percent.

But the most basic model of the PowerDaily will cost 20,000 yuan (US$2,900) more than previous models, Nanjing Iveco has said.

Sinotruk (China National Heavy Duty Truck Group Corp), China's top truck maker, has also developed a 12-liter common-rail fuel-injected engine that could meet the new standards.

The company has raised prices by an average of 30,000 yuan across its complete line of trucks, said Sinotruck's public relations department.