As China tightens vehicle emission standards, foreign carmakers likely to benefit

The Chinese government said it plans to tighten vehicle emissions standards to the same level as in Europe. These new rules will likely encourage the purchase of new cars, and foreign automakers General Motors Co., Volkswagen, and Hyundai will have the advantage because they can build vehicles that meet the more stringent worldwide emission requirements. VW spokesman Christoph Ludewig said that the company is well prepared to meet stricter vehicle standards and that since 2005, it has already lowered the fuel consumption and emissions of its fleets by 20%.
 
China Minzu Securities Co. said that as the government replaces their old bus fleets with electric models, they may opt to go to BYD Co., which is partly owned by Warren Buffett’s Berkshire Hathaway Inc. and Beiqi Foton Motor Co. So far, only the southern city of Shenzhen is using BYD’s K9 bus. Beiqi Foton, where the government is the largest shareholder, has delivered 160 electric buses to Beijing.
 
BYD would benefit from the subsidies that China would likely provide for alternative-fuel passenger vehicles. It has supplied 500 E6 electric cars for the Shenzhen police, in addition to the 300 E6 taxis that are already plying the city streets. The company earlier released newspaper ads claiming that tailpipe emissions will decline by 27% in China if BYD’s electric vehicles replaced all of the taxis and public buses in the country. (January 29, 2013)