Tech Push Leaving Many of China’s Domestic Carmakers Behind

China's quest for cleaner air and more fuel efficient vehicles will force many of the country's domestic carmakers to merge or go out of business, Reuters suggests.

New penalties announced last week will "name and shame" companies that fall short of Beijing's new fuel economy targets and may restrict production for noncompliant carmakers. China says about 30% of vehicle producers in the country, most of them domestics, failed to achieve suggested fuel economy targets last year.

Upcoming targets dictate average fuel economy levels of 6.9 liters per 100 km (34 mpg) in 2015 and 5 liters per 100 km (47 mpg) by 2020. IHS Automotive tells Reuters it will cost the industry many billions of dollars to achieve those goals.

Foreign carmakers are already deeply into the deployment of alternate energy sources and advanced powertrains in their home markets. But Reuters notes that most of China's more than 80 registered carmakers are struggling simply to compete with rivals on conventional technologies.