Chinese buy 22 million cars in 2013 – the countryside powers a new car boom, while cities suffocate. DetN says it’s not true

Gridlocked - Picture courtesy telegraph.co.uk,jpg

As of today, China is the world’s first country to report annual auto sales exceeding 20 million, and not by a hair. Sales in China rose a surprising 13.9 percent year-on-year to 21.98 million units, exceeding expectations, the China Association of Automobile Manufacturers CAAM said today. According to the association, that number could exceed 24 million by the end of this year.

20 million had been considered a doable target ever since Chinese car sales surged by a third to 18 million in 2010, turning the U.S. into a second-ranked nation of car buyers. Many expected the 20 million mark to be pierced in 2011, but it did not happen.

China’s booming economy slowed down, China’s mega-cities drowned in traffic and smog. City after city enacted draconian limits on car purchases. Beijing, Shanghai, Guangzhou and Guiyang already have severe quotas. Beijing’s northeastern neighbor Tianjin follows this year.

China’s fleet is relatively young and needs to follow tight emission standards. Beijing went to Euro 5 in 2013. Cars are not the main contributor to the often excruciating smog in China’s cities. Industrial production and coal-burning power plants are the main culprits. Massive construction sites create clouds of cement. Nevertheless, a relaxation of the quota system is not seen until public transportation catches up with traffic. Construction sites for subways crisscross Beijing, ensnaring traffic even more.

Quite tellingly, China’s  touted electrification of its car fleet remained just green smack talk. China’s mega-cities would be a hotbed of EV sales, if EVs would not be subject to the quotas. The fact that this didn’t happen shows that it’s not pollution what is targeted by the curbs. The clogged arteries of Beijing, Shanghai et al simply cannot take more cars, electric or otherwise.

Beijing alone amounted to 5 percent of the national car market before sales were curtailed. Taking a few large cities out of the game can severely hamper growth, which is what happened after 2010. Meanwhile, China’s tier 2 and tier 3 cities are getting off their motorcycles and into cars. Farmers increasingly motorize. Their conveyance of choice is what is called a “breadvan” in China, as mall cheap van like the Wuling Sunshine, which is built by the millions, making GM’s sales look good.

With only about 70 cars per thousand people, China’s car market is not anywhere near saturation, especially when compared to the 800 in the U.S. and the 600 in many parts of Europe. China’s massive infrastructure spending has brought jobs and money into the provinces, and it is spent buying cars. Away from China’s mega-cities, and out of the eyes of the Beijing and Shanghai-centric international media, China is winding up for another car boom.

us-china-auto-sales Picture courtesy IBTimes.com-1

China produced 22.1 million cars in 2013,  21.984 million were sold. In December, 2,134,200 units changed hands, marking a high  point in the year.

12 million passenger cars were sold in 2013, up 11.8% over the previous year. SUV sales of 2,9 million are up49.4% over the previous year. Sales of Chinese brands were up 11.4%, losing market share.  Exports from China were down 7.5% to 977,300. Complete 2013 import data are not yet available, January to November imports were up 1.8%, with Germany (222,900), Japan (210,900), and the U.S. (200,100,) the top three importers.

P.S.: The Detroit News can’t stand the story of the 22 million cars in China, or it decided that it is too much for its Detroit clientele. So the DetN writes:  “China’s auto sales rose 15.7 percent last year to 17.9 million vehicles, boosted by strong demand in December, an industry group reported Thursday.”