Auto sector predicted to keep stable growth in 2011

In 2011, the volume of China's auto industry has become the biggest in the world. Against this background, the focus of relevant government policies is shifting from supporting volume development to improving industrial standard. This poses new and higher requirements for automobile companies.
 
On the afternoon of January 31, 2011, Shenghua Motor Vehicle Inspection Station, located outside the Fifth Ring Road of Beijing, was not as crowded as it had usually been. Instead, most of the people waiting there were journalists. That was the first day for the first 17,600 winners of Beijing's car quota lottery to handle their vehicle registration procedure.

Contrary to people's expectation, only 30 plus vehicles had come for the number plate as of the afternoon. Later, the reporter learned from the automobile market in Beijing Asian Games village that the first round of car quota lottery had not significantly improved sales.

A salesperson in the market told the reporter that many winners of the car quota lottery were not anxious to make purchase because of the coming of the Chinese New Year. They chose to wait until after the New Year holiday so that they could have more time to make thorough comparisons before buying.

Also, some people delayed purchase because the sellers didn't have in-store cars due to insufficient supply from the automobile manufacturers. The salesperson, who had five-year experience in the industry, finally said that they could feel the apparent pressure brought by Beijing's car quota policy.

Some statistics can show us the other side of the story. Since September, 2009, Beijing's transport authority has begun to report the growth in the number of vehicles and drivers to the general public every week. The first statistics published by the transport authority showed that the weekly increment of vehicles in Beijing was 9,000 units.

However, by the end of October 2009, Beijing had witnessed a weekly growth of vehicles of over 10,000 units for 6 consecutive weeks, which meant a daily growth of nearly 2000 units. As of December 12, 2010, Beijing had a total number of 4.73 million motor vehicles, with a weekly growth of more than 20,000 units. As a result, the pressure on the road network has been increasing.

According to the calculation of Beijing's transport authority, the Second Ring Road is 32.7 km long, with 6 lanes. Assuming that the distance between two cars is 4.5 m, the full traffic capacity of the Second Ring Road would be 43,600 vehicles. With the same car distance, the full traffic capacity of the Third Ring Road is 43,600 vehicles, and the Fourth Ring Road 116,610 vehicles. The aggregate capacity of the three roads is merely 223,900 vehicles.

The contradiction between vehicles and roads is looming large in such internationalized cities as Beijing, Shanghai, and Guangzhou. On December 23, 2010, Beijing took the lead in publishing the Beijing Transport Improvement Measures. One of the clauses - to reasonably control the growth rate of passenger cars and slow down the overall increment of motor vehicles" - is considered to be a major challenge to China's auto industry that had enjoyed rapid development for the past 9 years.

 "If the ease of traffic jams is just regarded as an equal to restriction of the auto industry, then it will inevitably affect the development of the auto industry", said Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology, in response to the problem. Zhu Hongren pointed out that the government had provided special policy support to boost automobile consumption in dealing with the international economic crisis.

The output volume of China's auto industry had increased significantly in 2009 and 2010. According to statistics from China Association of Automobile Manufacturers, the year 2010 witnessed an output of 18.26 million vehicles and sales of 18.06 million vehicles, both scoring a growth rate of over 30 percent.

Zhu Hongren suggested that each region should work out measures that suit local conditions, learn from each other, borrow domestic and international experience in urban transport management, and make continuous efforts to ease traffic jams. A balance between the development of the auto industry and smooth urban transportation will undoubtedly be achieved.