New Beijing emissions levels 'a big challenge' (2)

"This includes Chongqing Lifan Group, BYD Co Ltd and SG Automotive Group, which currently have no China V standard models," said Yan.

"Some popular models, for example, the locally produced Ford Focus, Peugeot 207 and Suzuki Swift will also leave the Beijing market," he added.

Tony Wang, principal China powertrain analyst at IHS Automotive in Shanghai, said: "We think the measures will help Beijing reduce pollution, but the effect will not be as great as the public expects because lots of old China I and China II emission standard cars still run on the road."

Thus, the number of vehicles causing pollution will not be reduced, and the new regulation will only affect new, additional vehicles in Beijing, he said.

"The measures are only being introduced in Beijing, which means that all the other cities across China are not affected by the new legislation to raise emission levels to China V," Wang said.

Previous estimates show that Beijing has around 240,000 new cars on its roads annually on average, while there are 5 million vehicles in the city. The government will need to strictly curtail the use of old models across China, while enforcing higher-level emission regulations nationally, he added.

Namrita Chow, manager and senior analyst at IHS Automotive, said that should the government push forward any measures to reduce pollution nationwide by enforcing higher emission standards, the automakers expected to suffer the most will be the State-owned automakers, which lack the technology to adapt their models to meet the requirement.

"This would also make their models more expensive and push them out of reach for Chinese customers," Chow said.

As a result, the gradually improved emission standards may hinder the fast growth of local auto brands, she said.

"The Chinese government would have to initiate subsidies to encourage sales of China V vehicles across the country, and also help State-owned automakers to fast-track their products to meet higher standards." Chow also said new standards may provide an opportunity to help improve the development and use of new-energy vehicles in China, and encourage automakers to make more efforts in this sector.

China has set a target in its 12th Five-Year Plan (2011-15) of selling 500,000 electric vehicles by 2015. However, only 12,791 electric and hybrid vehicles were sold in 2012, contributing 0.7 percent of the nation's total passenger car sales.