中文USEUROPEAFRICAASIA
World / Reporter's Journal

Traffic congestion seen as cutting car buying in China

By Michael Barris (China Daily USA) Updated: 2014-02-13 10:52

China's love affair with the automobile has been hot and heavy. Now cities fed up with traffic congestion are slamming the brakes on new-vehicle registration. Welcome to the future.

A joint study by IHS Automotive, a Colorado-based market research firm, and Groupe Futuribles, a Paris-based non-profit organization focused on the future, finds that congestion in cities in China, Brazil and Russia will spur a 30 million-vehicle annual decline in auto sales by 2035 as the number of vehicles being driven globally falls.

"Tomorrow's cities just cannot fit the same number of cars per person as the mature market cities of today," IHS Automotive managing director Phillip Gott, the project manager for the study, said.

A key finding is that Asian cities, which are far more densely populated than their counterparts in Europe and the United States, will not achieve Western levels of car ubiquity. Beijing, for example, with about 130 cars per thousand people in its urban zone, has capped the number of vehicles it will allow to be registered in the city at six million. But 5.4 million vehicles have already been registered. An increase of 10 percent at most would leave China's capital well short of the 400 to 500 cars per-thousand-people ratio seen in European and American cities, according to the study.

On that note, Dalian, a city in northeast China, recently green-lighted a plan to restrict sales of new cars, becoming the nation's fifth city to do so after Beijing, Shanghai, Guiyang and Guangzhou. The next two years are expected to see Hangzhou and Chengdu both impose limits on new-vehicle sales, according to IHS. And the next few years should see at least six more cities - Tianjiin, Shenzhen, Shijiazhuang, Chongqing, Qingdao and Wuhan - impose similar caps, according to the China Association of Automobile Manufacturers.

Traffic congestion seen as cutting car buying in China

The caps stand out because it was only in 2009 that China - once a nation of bicycles - overtook the US as the world's largest auto market by sales. Auto sales in the ever-wealthy and car-hungry country are expected to top 21 million vehicles this year, compared with projected US sales of 16.4 million. The restrictions raise implications for multinational automakers such as Detroit's General Motors Co and Ford Motor Co which have poured billions of dollars into building a China presence. Investment bank UBS estimates that municipal restrictions on auto registrations can reduce sales of new cars by 30 to 50 percent. Last year, car ownership curbs reduced passenger vehicle sales in China by 500,000 units. By 2015, they are expected to reduce sales by 900,000 units.

Despite the sales pinch, China's auto marketplace should remain strong for some time. In September, Beijing issued the China Clean Air Act to enact stricter emission standards. The act could lead to as many as 5 million cars below the standards being scrapped by 2017 and replaced with new cars, according to IHS. Another statistic that should cheer auto executives: in 2017, replacement vehicles will account for 33 percent of total passenger vehicle sales in China, up from 21 percent in 2012, according to IHS.

Automakers also might get help from China's effort to improve public transportation. As Yang Jian, the managing editor of Automotive News China, has noted, by 2020 the subway systems of Shanghai, Beijing and Guangzhou will carry at least 40 percent of motorized transport. At that point, China's three biggest cities are likely to remove their limits on new-vehicle sales, Shanghai-based IHS analyst Lin Huaibin told Yang. The combination of new subways, scrapping of uncertifiable vehicles, replacement cars and strong demand in China's small cities will increase industry sales more than 10 percent a year for the next two years, IHS said.

As congestion and pollution continue to choke some of the world's largest cities, residents are increasingly expected to embrace car-share programs such as Zipcar to get around. As of Jan 1, 2011, 1,000 cities worldwide had car-sharing available to residents and companies in larger cities, according to the study.

With half the world's population living in urban areas, telecommuting and home offices commonplace and online shopping an everyday occurrence, the study finds that "the need for the traditional car is becoming less and less necessary".

Could vehicle ownership ultimately become a thing of the past? Only time will tell.

Contact the writer at michaelbarris@chinadailyusa.com

(China Daily USA 02/13/2014 page2)

Trudeau visits Sina Weibo
May gets little gasp as EU extends deadline for sufficient progress in Brexit talks
Ethiopian FM urges strengthened Ethiopia-China ties
Yemen's ex-president Saleh, relatives killed by Houthis
Most Popular
Hot Topics
...