Is Pricey Gas Killing of China's Automotive March?

♠ Posted by Emmanuel in ,, at 6/26/2008 01:06:00 AM
If you have had the (mis)fortune of driving in one of Asia's megalopolises, then bumper-to-bumper traffic that crawls from here to eternity is not unfamiliar to you. In these parts of the world, you do not really drive so much as you get stuck in traffic. Thus, traffic exacerbates concerns about automotive emissions, especially in urban centres. Of course, it is difficult to deny the Chinese private transportation as a matter of fairness. If those in the West have been motoring for years and years, then why should the Chinese have to go easy on auto ownership? Still, the sheer scale of potential automotive emission increases are mind-boggling: China is already the world's largest greenhouse gas emitter and has 16 out of 20 of the world's most polluted cities. Do we really want to see what happens if Chinese car culture reaches Western proportions?

However, high gas prices can counteract visions of Chinese automotive hell on Earth. Recently, the government decided to reduce fuel subsidies, making consumers bear more of the brunt of dear gas worldwide. Xinhua reports that automotive sales are down for two consecutive months. Certainly, it's hard to extrapolate from two months' worth of data, but a stalling or even declining trend may be in store:

China's motor vehicle sector realized a production against sales ratio of 97.82 percent in May. Both output and sales, however, declined month-on-month for the second consecutive month, the China Association of Automobile Manufacturers said on June 12.

China produced 854,100 motor vehicles in May, down 12.96 percent from April but up 20.2 percent over the same month of last year. It sold 835,500 vehicles, down 9.44 percent month-on-month but up 17.04 percent year-on-year.

The total output included 591,400 passenger vehicles, down 10.2 percent from the previous month but up 20.03 percent over a year earlier. The output of commercial vehicles was 262,700 units, down 18.61 percent month-on-month but up 20.58 percent year-on-year.

The monthly sales included 564,600 passenger vehicles, down 6.66 percent from a month ago but up 15.59 percent over a year earlier. Monthly sales of commercial vehicles was 270,900, down 14.74 percent month-on-month but up 20.18 percent year-on-year.

May saw 434,700 cars produced and 415,200 cars sold nationwide, down 11.49 percent and 6.6 percent, respectively, from April.

Furthermore, a survey reported in Xinhua suggests that the Chinese are relying more on public transportation. Moreover, even those who do own automobiles already have cut down on their mileage as motoring becomes increasingly uneconomic due to high fuel prices and persistent traffic snarls impeding forward progress:
Beijing resident Zhuang Yan uses her car mostly on weekends, for drives to the outskirts of the capital. On weekdays, the 29-year-old public servant simply forgets that she has a car. She and her husband seldom drive to work, "because it sometimes takes longer by car than on foot, especially during rush hour".

What is more, car maintenance costs too much, Zhuang told China Daily over the phone. "As oil prices soar, public transport is a wise choice for avoiding traffic jams and parking problems in the capital," she said. Zhuang is part of a group researchers call "owners of idle cars" - people who have cars but seldom drive them. One in 10 car owners in the country belongs to such a group, the 2008 Foton Chinese Index for Mobility released on June 11 showed. The index was derived from a mobility survey jointly conducted by Beijing-based Beiqi Foton Motor Co Ltd and the Horizon Research Consultancy Group.

The two groups started releasing the index in 2005, offering an insight into the transport habits of the Chinese. It showed the extent of people's reliance on motor vehicles in social and economic activities, and how private cars could further influence people's lifestyles and way of thinking. The latest study polled 4,545 people aged between 18 and 60 in 36 cities and towns nationwide.

It saw the Chinese scoring 61.42 points out of a maximum 100 for this year's index, 3.09 points higher than in 2005, showing great strides taken in mobility, the survey said. However, corresponding developments in the automobile industry have also had negative impacts such as serious traffic congestion and greater strain on limited oil resources in the country.

These factors have prompted more motorists to become owners of idle cars, researchers said. Four out of 10 of such owners had done so because of spiraling gasoline prices, researchers found. The surveys showed that about half of urban private car owners thought the fees for car maintenance and oil consumption were "affordable" in 2005, but only one out of five in the 2007 index thought so.

"Driving is a kind of burden to me. Last Friday, fuel prices started to rise again, which means every month I have to pay an additional 300 yuan ($44). I believe more than 20 percent of car owners will use public transport by next week," said Chen Daping, a 30-year-old worker in Beijing.

"It costs me only 1.8 yuan to take the bus from Tian Tongyuan in Changping district to Anzhenli in Chaoyang district, but more than 20 yuan for gasoline to drive a car. What a deal!" wrote an Internet user under the name of "tyy Ma" on news portal

The high costs were not the only reason for the increasing number of owners of idle cars. Traffic jams also played a role, researchers found. The economic loss caused by traffic jams in Beijing was the highest among the cities in the country, about 375 yuan per person per month, followed by Guangzhou at 273.8 yuan and Shanghai at 228.2 yuan. The researchers said convenient public transport networks should be developed to help solve the problem effectively.

Beijing has reportedly done a good job in developing a convenient and affordable public transport system, which was ranked first in the survey. The survey showed that about 21.3 percent of respondents suggested improving public transport routes to help alleviate traffic congestion, while 14.3 percent said special lanes should be arranged for buses. The rest suggested improving road conditions and limiting private car usage.

These are interesting times. I really think that the next wave of innovation in automotive design will arise in meeting the Chinese challenge: It isn't appropriate to deny them private transportation if they want it, but alternative energy sources are necessary that cost and pollute less. The days of the internal combustion engine as we know it may be numbered.