BAOSHAN Iron and Steel Co and SAIC Motor Corp will set up a laboratory to research jointly in new steel products to cut vehicle weight, they said yesterday.

Chinese cars are now 8 to 10 percent heavier than overseas competing models while commercial vehicles are more than 10 percent heavier, said Yang Shuyi, a senior engineer of SAIC, China's largest auto maker.

The weight of Chinese cars should be reduced by 30 to 35 percent by 2020 from 2005's level, and that could lead to a 20 to 25 percent reduction in average fuel consumption per car, Yang said.

Under the deal, both Shanghai-based firms will jointly advance the development and application of technologies that can make auto steel thinner and stronger.

New-energy cars, whose battery will add weight, also makes it urgent to reduce the weight.