Chinese consumers are buying cars at breakneck speed, spurred on
by new government policies that allow banks to lend on vehicles
and, for some, through a desire to impress the neighbors.
More than 3.91 million, of the 4 million motor vehicles
manufactured between January and November 2003, were sold.
"China's auto demand is expected to rise to 10 million by 2010,
second only to North America," said Zhang Xiaoqiang, vice-minister
in charge of the State Development and Reform Commission in
mid-December.
Rising income accounts for only part of the buying frenzy. A
car, like a laptop computer and a house, has long been regarded as
a coveted emblem of a well-off life.
The Chinese Government's policy to encourage individuals to buy
cars or houses in installments through bank credits has boosted
consumption of luxury items. The concept of credit is relatively
new in China.
"I just have to pay a 20 per cent down-payment, a mere 40,000
yuan (US$4,820) of the total cost, and the rest will be covered in
eight years by a monthly payment of 1,600 yuan (US$193)," said Wang
Zong, an air-conditioner company manager who has just bought a new
car.
"Next year will see auto production reach 5 million. It's no big
problem to increase it by 1 million if auto-related policies remain
stable," said Li Jingsheng, director of the China Auto Information
Research Institute.
Major world automakers, including German's Volkswagen and BMW,
General Motors of the United States, and Toyota and Nissan of
Japan, have rushed to enter the lucrative market by forming joint
ventures and alliances with Chinese partners.
110,000 yuan (US$13,300) Jetta produced by FAW-Volkswagen, the
joint venture between Volkswagen and China's First Automotive Works
(FAW), are to be sold for their popular and stable performance on
the Chinese market.
Luxury cars like the locally produced BMW-3 and BMW-5 series
have also been well received by the Chinese. Some 800 were sold
since their debut in mid-October.
Among domestic cars, this year's star QQ, a mini-car launched in
summer, has been in the spotlight. It's competitive price 49,800
yuan or US$6,000 and colorful looks make it a "pet" for many young
people.
"Owning a car is no big news now. Some people come to me and
decide to buy a car within one hour as if they are buying a TV.
It's amazing," said Gao Lelin, a car salesman at the Asian Games
Village auto market, the biggest of its kind in Beijing.
"It's especially true when the price is below 150,000 yuan
(US$18,000)," Gao said. He referred to the amount as "affordable"
for many families nowadays.
The current situation was unimaginable two decades ago when
China was at the threshold of reform and opening-up.
(China Daily January 2, 2004)