Volkswagen and General Motors To Benefit From Beijing Worsening Smog

(Bloomberg) With toxic smog engulfing Beijing and much of the rest of China, the government is considering tighter vehicle curbs and emissions standards that match Europe’s. That could benefit General Motors Co., Volkswagen, and Hyundai. The new rules are likely to spur many drivers to buy new cars, and unlike most domestic automakers, overseas companies can produce vehicles that comply with stricter global standards for emissions.
“All foreign car and truck makers are capable of meeting very advanced emission standards and will have no problems,” said Ashvin Chotai, managing director of Intelligence Automotive Asia in London. “So it would put Chinese brands at a disadvantage.” Volkswagen is “well prepared” for stricter vehicle standards and has reduced the fuel consumption and emissions of its fleets by 20 percent since 2005, said Christoph Ludewig, a spokesman for the company in Beijing.
BYD Co., partly owned by Warren Buffett’s Berkshire Hathaway Inc. and Beiqi Foton Motor Co. may also win more orders as governments speed up replacement of aging bus fleets with electric models, according to China Minzu Securities Co. BYD’s K9 bus is currently in use in the southern city of Shenzhen, and the automaker says it plans to introduce the all-electric vehicle to more Chinese cities with government support. Beiqi Foton, whose biggest shareholder is the government, delivered 160 electric buses for Beijing last month. BYD would also benefit from possible subsidies for alternative-fuel passenger vehicles. The company is supplying 500 of its E6 electric cars to Shenzhen’s police, adding to 300 E6 taxis already on the city’s streets. The company took out newspaper advertisements this month claiming that tailpipe emissions would fall by 27 percent in China if the country’s entire taxi and public bus fleets were replaced with BYD’s electric vehicles.