Clear The Air News Blog Rotating Header Image

Pollution, Fuel Costs Among Worries As More Chinese Own Cars

06:53 AM CDT on Tuesday, August 5, 2008 – By JIM LANDERS / The Dallas Morning News

SHANGHAI – For 26-year-old bachelor Yin Guangzi, owning a car is about the status.

“It’s very important for face,” he said as he browsed a Volkswagen showroom. “Your car is your second sweetheart.”

Young mother Zhu Saijuan says it’s about taking along her 3-year-old daughter when she needs to get somewhere.

Whether it’s for bling or babies, China is becoming an auto nation. The communist government first allowed people to own a vehicle in 1984. By the end of this year, about 50 million cars will ply China’s expanding network of streets and highways.

“The market has absolutely exploded,” said Margaret Brooks, marketing director of General Motors’ China Group.

Some auto industry analysts predict that China will eclipse the U.S. by 2015 to become the world’s largest car market.

That’s good for ailing automakers like GM, which expects to sell 1.2 million new cars in China this year (out of global sales of about 9 million). It’s also good for middle-class Chinese gaining the freedom of mobility.

Adding to pollution

But cars are also the main culprits in China’s chronically polluted air. Cars are responsible for China’s fast-growing appetite for oil as well, which is feeding this year’s price shocks and straining the global energy balance.

Many of China’s economic leaders say China is on an unsustainable car-buying path. Science and Technology Minister Wan Gang last month said Chinese manufacturers need to move quickly to zero-emission vehicles powered by fuel cells.

The government doesn’t see self-restraint as the answer.

“It’s not so easy to say to the Chinese, ‘You have to consume less or you’re going to kill the planet,’ ” said Christine Loh, director of the Hong Kong think tank Civic Exchange.

Huang Ying, a Shanghai sales manager who drives about 15,000 miles a year in his new Peugeot sedan, likes the proven technology of the gasoline-fired, internal combustion engine. He says it’s up to others to move to less-harmful fuels such as hydrogen or electric cars.

“The American people perhaps can afford that,” he said. “I’d rather be driving one of those big cars with a big engine like you have.”

Affording a car

Buying a car at prices that start around $9,000 for a domestic make is still a huge investment in a country where per capita income is not even a fourth of that. And most pay cash.

GM, which has found a global sweet spot in China selling cars between $14,000 and $100,000, estimates the threshold for a Chinese new car buyer is around $6,000 in annual income. That puts a car within reach of 40 percent of Chinese households.

With its partner Shanghai Automotive Industry Corp., General Motors Acceptance Corp. gained permission in 2004 to introduce auto financing to China. The typical loan is only for one year.

Still, there is an evident tension within the Chinese government between encouraging the car industry and curbing car pollution, fuel consumption and traffic congestion.

The government promotes an auto culture by subsidizing gasoline prices at about $3.40 a gallon, investing heavily in a highway system and ordering China’s 400 million bicycle owners to the curb, where they compete for sidewalk space.

In crowded Shanghai, however, the city charges new car owners roughly $7,300 for registration and license plates. In Beijing, where an average of more than 1,300 new cars join the city’s fleet of 3.3 million vehicles every day, luxury car plates can cost even more.

Cars have catalytic converters and fuel injection. There are no emissions inspection stations, but all new cars start out with pollution technology that meets air-quality standards that applied to the European Union in 2000. Standards in Beijing are tougher.

Issue of fuel

China’s fuel-economy standards require 35 miles per gallon for new cars, and buyers of cars with larger engines pay consumption taxes as high as 20 percent of the purchase price.

A National People’s Congress committee has advocated an end to gasoline subsidies and higher-still “gas guzzler” taxes.

China’s automakers are hungry for fuel-economy breakthroughs. GM makes a hybrid Buick LaCrosse in Shanghai and promises to bring its electric model the Volt to China as well. Some Chinese automakers are already tinkering with electric cars.

Fuel-economy technologies that allow China to leapfrog advancements in Europe and North America may be the best hope for cleaning China’s air and easing the pressure on world oil markets, says Kelly Sims Gallagher, author of China Shifts Gears.

“I’ve never met anybody in China who doesn’t want to have a car,” she said. “We have to find a way to make them cleaner and more efficient, and we have to try and provide good alternative transportation options so you can at least eliminate the convenience and mobility factors.”

Olympic efforts

To clean up Beijing’s pollution in time for the Olympics, the government ordered half the city’s cars off the streets every other day. (Plates ending in odd numbers are allowed only on odd-numbered days, and alternate with cars that have even-numbered plates.)

The Chinese capital’s wide boulevards are no longer jammed with vehicles, and real estate entrepreneur Dong Jie, who drives a 2007 BMW 320i sedan, hopes the government keeps the odd/even restrictions after the Olympics.

“Having all these cars definitely adds to air pollution, and the government needs to solve this problem,” he said while wiping down his sedan at a car wash. “And without these restrictions, Beijing’s roads cannot hold so many cars.”

A manager at the car wash, one of millions who gain economically from China’s love affair with automobiles, saw it differently. He hopes the restrictions end soon.

“On Saturdays, you could not see the end of the line of cars waiting for washing,” he said. “Now there’s just five or six.”

Comments are closed.