China may be the world's largest car market, but increased air pollution has created a public backlash against the automobile.
It's also spurring the government to take action, and carmakers are likely to respond using the same suite of technologies they use in the rest of the world to cut emissions and boost fuel economy: smaller, more efficient engines with direct injection, transmissions with more gears, and start-stop and perhaps mild-hybrid systems.
New fuel-economy rules require new passenger cars to achieve 34 mpg by 2015, and 47 mpg by 2020.
In addition to stricter fuel economy standards, China is also tightening its emissions standards, which are based on the European system.
Euro 4 emissions standard took effect in China in July 2013, and the stricter Euro 5 standards will follow on January 1, 2018.
The push for fuel economy means China could become a major market for suppliers of fuel-saving technologies, such as direct-injection and mild-hybrid systems, according to a recent report in Wards Auto.
Audi Q3 Trans China Tour 2011
The company's sales in the country grew 28 percent last year.
Bosch also anticipates mild-hybrid powertrains to become more prominent. The company is pushing a 48-volt system that includes engine start-stop, a booster for restarting the car, and regenerative braking.
The supplier believes this system can boost fuel efficiency by up to 15 percent, and will add no more than $1,000 to the cost of a car in production form.
Manufacturers are also expected to downsize their engines, relying on turbocharging and direct injection to increase power.
BorgWarner expects half of all Chinese cars with 1.0-liter to 4.0-liter engines to be turbocharged by 2020, up from 25 percent three years ago.
To meet this expected demand, the company is building a new plant in the city of Taicang, which will grow its Chinese turbocharger production by 50 percent.
While stricter standards may force the adoption of more-efficient cars, the government's attempt to encourage adoption of electric cars hasn't been successful so far.
Like other countries, China offers purchase incentives--60,000 yuan (about $9,600) for electric cars, and 35,000 yuan ($5,600) for plug-in hybrids.
Yet these subsidies have been met with buyer resistance. Out of around 20 million new cars sold in 2013, just 17,600 were plug-ins.