GM, VW may benefit from China’s plan to impose stricter emissions standards image

China is considering tighter vehicle curbs and emissions standards following toxic smog that has been affecting Beijing and much of the rest of the country for weeks now.

The government’s new rules may be good for carmakers including General Motors, Volkswagen and Hyundai, in a market where sales are forecast to top 20 million units this year. That’s because the new rules are likely to push drivers to buy new cars and overseas companies are more capable than domestic manufacturers to produce vehicles that comply with stricter global standards for emissions.

Volkswagen has reduced the fuel consumption and emissions of its fleets by 20 percent since 2005 and is “well prepared” for stricter vehicle standards, Christoph Ludewig, a spokesman for the company in Beijing, told Bloomberg. EV-maker BYD, partly owned by Warren Buffett’s Berkshire Hathaway and Beiqi Foton Motor, may also win more orders as governments speed up replacement of aging bus fleets with electric models.

BYD may 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.

On January 12 official measures of PM2.5, fine airborne particulates that pose the largest health risk, rose to 40 times the levels considered safe by the World Health Organization, sparking public calls for the government to take action.