Stricter emissions limits can impede India's auto exports:S

New Delhi, May 8 (UNI) Stricter environmental regulations could affect the burgeoning auto markets in China and India, a study says.

"Further regulations in target markets such as Europe to meet planned carbon diaoxide (CO2) requirements could represent a significant additional hurdle to the export ambitions of burgeoning auto industries in China and India," Standard&Poor's credit analyst Maria Bissinger said today.

Tightening vehicle emissions legislation in the world's major car markets also pose a significant threat to the credit quality of global automakers, the rating agency said in its report '' Can global automakers meet emissions limits without steering off the road?".

With many automakers suffering declining profits or operating losses, the proposed emissions standards - estimated to cost between 1,300 dollars and 1,900 dollars per vehicle in the US and between 600 dollars and 3,000 dollars in Europe - could seriously undermine profitability, the report added.

"We consider there is a real risk to global automakers' financial performance, particularly as some are already under pressure from razor-thin margins," said Bissinger.

She said even BMW AG, the most profitable automaker, generating about 2,200 dollar in operating profits per vehicle, may be confronted with higher costs to meet the proposed new standards due to the high carbon dioxide emissions of its fleet. Many European volume automakers achieve less than 500 dollars profits per vehicle (excluding earnings from financial service operations), but are closer to the proposed future emissions target, she added.

For the US automakers General Motors and Ford Motor, struggling to reducing legacy costs and stemming huge cash losses from their North American operations, S&P analysis said their ability to make the massive investments necessary for cleaner or more fuel-efficient vehicles will largely depend their ability in returning to sustained profitability over the next few years.

UNI