How Responsive Are New Car Buyers in India and China to Factors Driving Fuel Consumption?

Abstract

China and India, the world’s two most populous developing economies, are also among the largest automotive markets and carbon emitters. To reduce carbon emissions from the passenger car sector, both countries have considered various policy levers that affect fuel price, car prices and fuel economy. This study estimates the responsiveness of new car buyers in China and India to such policy levers and drivers, including income.