The scandal over falsified U.S. vehicle emission tests that has engulfed Volkswagen AG (VW) is raising doubts from Chinese investors over the future of China's fledging diesel engine technology, heralded by industry heavyweight Weifu High-Technology Group Co, news portal cnstock.com reported Wednesday.
Volkswagen said on Tuesday the scandal could affect 11 million of its cars around the globe.
VW said it would set aside 6.5 billion euros ($7.3 billion) in its third-quarter accounts to help cover the costs of the biggest scandal in its 78-year-history, blowing a hole in analysts' profit forecasts.
In the first half of 2015, Weifu High-Technology Group posted operating income of 3.39 billion yuan ($531.2 million), down 3.95 percent from the same period last year. But its net profit increased 24.44 percent year-on-year to 1.04 billion yuan.
The company has been focusing on emission control technologies. It also cooperates with German auto supplier Bosch.
Diesel engines are "traditionally used mainly by commercial vehicles, such as tractors in agriculture and buses and minivans in public transportation. But the diesel-powered passenger vehicle sector in China is a growing market," Han Bing, an automotive industry expert, told the Global Times Wednesday. Han owns a car workshop in Daqing, Northeast China's Heilongjiang Province. Han said compared with European markets, ownership of diesel-powered passenger vehicles in China is quite low but the trend is for these vehicles to become an alternative to gasoline-powered passenger vehicles.
Due to fuel efficiency and a customer preference for sport utility vehicles in China, more car makers have been considering the introduction of additional diesel vehicles to the Chinese market, according to a report by the 21st Century Business Herald newspaper in July. These moves painted a rosy picture for the developers of clean diesel technology such as Weifu.
On a platform run by the Shenzhen Stock Exchange, on which investors may interact with listed firms, investors have been asking Weifu about the future of diesel-powered cars. "The VW scandal has shown that regulating diesel-powered vehicles is much more difficult than gasoline-powered vehicles," one investor wrote on Tuesday.
Weifu, a leading company that pushes the development of clean diesel technology and tailpipe control technology, addressed investor concerns by saying that the VW scandal is a fraud and has nothing to do with diesel technology itself, and it will not stop the Chinese government from issuing more stringent emission rules.
The regulation of vehicle emissions and the promotion of passenger vehicles powered by diesel-powered engines both hinge on the government's resolution to curb air pollution, the company said.
Shenzhen-listed Nanhua Instruments Co, a maker of instruments for testing tailpipe gas emission levels, has gained some investor attention over whether its market share will rise following the VW scandal.
