Tougher emission rules lure global parts suppliers
Print Edition
GLOBAL companies that specialize in making vehicle emissions cleaner are rushing to take advantage of China’s war on pollution, as Chinese automakers look to comply with tougher regulations in the world’s biggest auto market.
Firms from Bill Gates-backed startup EcoMotors Inc to Faurecia SA, a parts supplier controlled by French giant Peugeot SA, are jostling to help automakers meet new diesel emission rules taking effect in January, despite concerns the standards may not be strictly enforced.
“Generally speaking, we will benefit from higher emission standards in China as they will further spur our business growth,” said Liu Xiaoxing, vice president for China of Cummins Inc, a US diesel engine maker that partners with Faurecia and counts China as its biggest and fastest-growing market.
Pollution has hit crisis levels in China after decades of growth-at-all-costs. Automobiles are chiefly responsible for China’s foul air, the country’s environment watchdog said.
Among other measures to tackle the problem, from next year China will adopt a new set of diesel emissions regulations aimed at eliminating mainly trucks and lorries that produce high levels of harmful substances such as nitrogen oxides, carbon monoxide and particulate matter.
The country will also take 6 million high-emission cars off the road this year, and is drafting regulations aimed at slashing fuel consumption by passenger vehicles.
Foreign firms to gain
“Foreign component makers will benefit most from the stricter emissions standards over the long term, as they have more advanced technology than Chinese suppliers,” said Li Jia, an analyst at IHS Automotive.
Leading component suppliers that can help Chinese automakers cut emissions include Continental AG, Robert Bosch GmbH, Denso Corp, Tenneco Inc and Faurecia, Swiss private bank Bank J. Safra Sarasin Ltd said in a report on June 3.
The technologies they bring to the table include exhaust treatment systems, turbo chargers, direct injection mechanisms and powertrain controls.
The World Health Organization says about 2 million people die annually from air pollution, mostly in developing nations. Beijing is among the world’s most polluted cities, it says.
Concentrations of fine atmospheric particles known as PM2.5 averaged 89.5 micrograms per cubic meter daily in the Chinese capital last year. That was 156 percent higher than national standards.
From January 1, China will adopt the long-delayed national stage 4 emission standard — the equivalent of Euro 4 standards — on diesel vehicles, meaning automakers will be allowed to sell only trucks and lorries that puff out lower levels of pollutants than they do currently.
China also aims to cut average fuel use by passenger vehicles to 6.9 liters per 100 kilometers in 2015, from 7.38 liters now.
Mathias Miedreich, Asia president of Faurecia’s emission control technologies unit FECT, whose clients include makers of both diesel and gasoline-propelled vehicles, said annual sales stood to grow 40 percent faster than the broader auto industry’s growth rate over the remainder of the decade.
The company forecasts FECT’s China revenue will double to 2 billion euros (US$2.72 billion) by 2020.
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