IF the US government bails out the car makers, this could be good news for Singapore.

The US government will set conditions which car companies were reluctant to follow before.

President-elect Barack Obama plans to put one million 150-mpg (about 64 kpl), plug-in hybrids on US roads within six years and give American consumers a US$7,000 ($10,700) tax credit to buy these fuel-efficient cars.

This retooling of Detroit impacts Singapore.

Dr Michael Quah Cheng-Guan, a Harvard-trained American fellow at our Energy Studies Institute, said there would be a trickle-down effect that would help our economy.

"For instance, the need to develop and improve components of these electric systems would spin off R&D benefits to Singapore's strength in semiconductors, power control devices, IT command and control programs, and even to the new nano-materials, which will serve the high power needs for switch gear and associated peripheral components."

But it will be a tough ride for US car makers, said Dr Quah, and it remains to be seen if the US can get over "its obsession with what Singapore's (Ambassador-at-large) ProfTommy Koh calls the "Socially Unacceptable Vehicles (SUVs)".

Said Dr Quah: "The car lobby remains very strong simply because American car companies (and their suppliers) constitute a major industry in the US, where many jobs, including those in my home state of Michigan, are on the line."

Last but not least, the US - as a country with 5 per cent of the world's population using 25 per cent of its energy resources - must admit that there are huge opportunities in energy-efficiency gains.

Zhen Ming, a Harvard-trained economist based in Singapore, is a freelance contributor

This article was first published in The New Paper on Dec 5,, 2008.