What China Really Needs are More Cars

Friday, November 24, 2006 0:11
Comments Off on What China Really Needs are More Cars

Prior to SARS, getting around town was convenient. From my dorm, I could make it to Tiananmen in under 20 minutes and traffic was light most of the day. Following SARS, and the ensuing believe that buses and taxis were actually the hosts for SARS, anyone who could by a car did… and thus China’s car culture changed from a want to a need and light traffic turned to gridlock.

To be fair, the situation was a “pefect storm” scenario where the public identified cars with personaly safety, the banks were lending money with little or no money down, and the goverment had yet to finish the infrastructure necessary to hold the thousands of new cars hitting the road each day.

And while there was a snowbal effect of traffic getting worse and worse in the major cities, traffic was not gaining speed but slowing down… some might say grinding to a hault.

Now 3 1/2 years later, it looks like China’s car market is once again getting ready to bust wide open as foreign companies have recently begun to announce the need to expand their investment to build more capacity in China.

Audi itself recently reported that sales targets will soon be 200,000 unit (Rolls Royce apparently sold 250 units in China this year), and if other announcements (Ford, Toyota, JCI, Goldman Sachs, and Geely) by the auto manufacturers aren’t enough to convince you, then maybe the announcement from Baosteel that they will double automobile sheet output by 2010 to 5 million tons will give a better indication of where things are going in the future.

With all the new cars set to come to China, it is good to know that the cities of Shanghai, Chengdu, Beijing, and others are planning to significantly expand their subway and light rail networks….

Both comments and pings are currently closed.