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Automakers' best hope

(China Daily)
Updated: 2009-02-12 07:43

The fact car sales in China topped those in the United States in January for the first time fully demonstrates the growing importance of the Chinese market for automakers at home and abroad.

Though the monthly data does not reflect the actual size of auto markets in China and the United States, it gives a good boost to those automakers who heavily bet their fortune on Chinese consumers.

However, the best hope that automakers can have about the Chinese market should not simply be a continuous increase in demand for traditional cars to cushion them against the global financial crisis and economic recession.

Instead, they should expect and do their most to help foster a steadily expanding market for green cars in China to underpin their future success.

According to data from the China Association of Automobile Manufactures, auto sales in China reached 735,500 units in January, temporarily edging ahead of total US vehicle sales of about 680,000.

China's sales data was not impressive in itself. The January figure was down 0.83 percent month on month and 14.35 percent year on year. Yet, compared with unusually depressed US sales, China's auto market looks even more attractive, even though its sales growth in 2008 fell below 10 percent for the first time since 1999.

Automakers' confidence in the Chinese market is well justified.

China overtook Japan as the world's second largest auto market in 2006. Admittedly, a one-month lead, or even a year lead as estimated, in total vehicle sales may not mean that China's auto market is really as vast as the US'. Yet, given its 1.3 billion population, China's auto market is far from saturated, unlike those in developed economies. And predictable increases of personal wealth in China will only further boost demand for private cars in coming years.

While the huge potential of the Chinese market is unquestionable, the burning problem for automakers is whether they can translate it into reality with cleaner and more energy-efficient cars.

Chinese consumers need more cars to make their living more convenient, but they can definitely not afford to drive in the same old fashion that pollutes the sky, jams the street and exhausts energy resources.

For those automakers who use huge fixed investment in traditional production lines and technologies as an excuse to refuse green cars, the rapid emergence of a new market as big as the Chinese one should be an ample reason for them to reinvent the wheel.

The Chinese government has rolled out measures to help boost vehicle sales as part of a multibillion-dollar economic stimulus package while stressing promotion of cleaner, more energy-efficient engines.

That is a clarion call for all automakers, home-grown or not.

(China Daily 02/12/2009 page8)