Zhang Yi: Beijing blockade will affect the domestic auto market

The long-swept Beijing traffic congestion plan seems to be coming soon. Beijing Party Secretary Liu Qi revealed that the State Council has agreed in principle to Beijing’s plan for managing traffic congestion.

Although this plan has not yet been formally announced, it is understood that the content of this plan will not only restrict single and double lines for some heavily congested road sections, but also imposes higher requirements on car buyers to prevent excessive growth of motor vehicles.

Restrictions on purchasing restrictions for other cities

In recent years, more than 500,000 new cars have been added each year in Beijing, and the effect of the one-week-old car that is implemented once a week after the Olympics has been offset by new vehicles. In the past one or two months, Beijing will restrict the purchase of cars in the next year, and many residents have panic buying. Many models are out of stock in Beijing. It is expected that more than 800,000 new vehicles will be added in Beijing this year.

If Beijing restricts the purchase of automobiles, it will have a serious impact on the domestic auto market. Beijing's annual sales of automobiles account for a small proportion of the country’s total car sales, but since Beijing is the capital, Beijing’s auto market is a benchmark for the national auto market. The decline in sales volume in the auto market in Beijing has a great demonstration effect. Like viruses, it quickly spread to other cities.

Some experts believe that the timely restrictions on car purchases in Beijing will only reduce the sales of hundreds of thousands of vehicles each year. With a market size of more than 17 million vehicles in China this year, the reduced number of hundreds of thousands of cars will be easily recovered in other second and third tier markets. The impact on the domestic auto market will not be too great.

However, everyone is worried that in almost all major cities in China, including some second-tier cities, traffic congestion is widespread. If these auto markets also follow Beijing's practice and restrict car purchases, the impact on the domestic auto market will be too great.

The automobile society is coming too fast

In 2008, when the global financial crisis raged, China’s auto sales were less than 9 million vehicles a year. As an important part of responding to the financial crisis and expanding domestic demand, the state has issued a series of preferential policies to encourage automobile consumption. In 2009, the domestic automobile market once again experienced a blowout, and car sales exceeded 10 million units in one fell swoop, reaching 13.64 million vehicles. Become the world's largest automotive producer and the largest new car consumer market. In 2010, the momentum of the previous year continued, and domestic car sales continued to advance at a high rate. Over 17 million vehicles in the year were a foregone conclusion. The 17 million vehicles are the highest annual sales of automobiles in the United States.

The spurt growth in car sales and the rapid expansion of car ownership have brought great pressure on China's urban transportation and urban environment. Severe traffic jams and increased air pollution. As the largest city in China with the highest vehicle ownership, Beijing has more than 4.6 million vehicles.

When our city was originally planned, it was designed with public transport supplemented by bicycles. The road layout and facilities were not adapted to the automobile society. And our car society is coming too soon and brings incompatibility.

Chinese cars still have room for growth

According to the statistics released by the Ministry of Public Security Administration of Communications, by the end of the third quarter of 2010, there were only 70 million vehicles in China, which was lower than Japan’s 75 million vehicles and the United States’ 285 million vehicles. The number of vehicles owned by Chinese thousand people is only 52, which is less than half of the average level of 128 thousand people worldwide.

However, due to China's unique urban-rural dual structure, 70 million vehicles are concentrated in large cities and the eastern coastal areas, and the distribution is uneven. As a result, there have been some places where cars are full and there are few cars in some places. Thousands of cars in some mega-cities have reached hundreds of vehicles, while some thousands of people in mid-western and second-tier cities have only a dozen or so. The potential for development is enormous.

Since China's accession to the World Trade Organization at the end of 2001, China’s car sales have grown at an average annual rate of more than 20%, which is rare in the world. In the past two years, with the gradual saturation of vehicles in some large cities, many automobile manufacturers have placed growth in second and third-tier cities. And actively establish sales agencies in these second and third-tier cities. Not long ago, Changan Ford opened 40 automobile 4S points nationwide on the same day, focusing on the central and western regions. Except a few are located in provincial capitals, others are in some prefecture-level cities. This shows that there is still great growth potential in these cities.

With the increasing traffic congestion, some major cities in China must limit the purchase of cars, which will inevitably affect the car sales. The majority of car manufacturers may wish to focus on the central and western regions and put them in the second and third tier cities. Only in this way can the sustainable and stable development of the automotive industry be ensured.