Twice in one day last week, Beijing's air got so bad that taxi driver Jiao Quanyou almost plowed into the vehicle in front of him.
"I didn't see the car," said Jiao, who has driven a cab for 12 years. "I quit four hours early that day even though I made a loss."
In contrast to Jiao, foreign carmakers in the world's biggest auto market are poised to profit from this month's record-breaking pollution. With toxic smog engulfing Beijing and much of the rest of the country for weeks now, China is considering tighter vehicle curbs and emissions standards that match Europe's.
That could benefit General Motors Co, Volkswagen AG, and Hyundai Motor Co in a market where sales are forecast to top 20 million units this year, according to industry researcher Intelligence Automotive Asia. 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.
Tailpipe emission ads
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.
BYD shares have risen 14 percent this year in Hong Kong trading, outpacing the 4.3 percent gain in the Hang Seng Index. Beiqi Foton surged on January 14 after air pollution hit record levels and is up 3.3 percent since then, versus a 0.4 percent gain for the Shanghai Composite Index.
Official measures of PM2.5, fine airborne particulates that pose the largest health risk, on January 12 rose to 40 times the levels deemed safe by the World Health Organization, sparking public calls for government action.
Four days later, the environmental protection ministry released for public consultation a draft of stricter national vehicle emission guidelines equivalent to the standard applied to passenger and light vehicles in the European Union, though it left open the date for implementation.
Beijing will take the lead and introduce the stricter standards in the capital next month, Xinhua news agency reported, citing the city's environmental protection bureau. The sale and registration of diesel and gasoline vehicles that don't meet the new requirements will be banned from February 1 and March 1 respectively, according to the report.
To cope with congestion and pollution, the government should develop more mixed-use districts where residents can live and work to reduce the need for commutes, boost public transport, and encourage the use of bicycles, said Peter Duncan, Shanghai-based chairman of urban planning firm Hassell.
