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Eight Challenges of China's Automobile Market in the Next Decade

During the years 2000 - 2009, China's automobile market has developed greatly. The annual number of sales has jumped from Carsaround 2 million cars, to 13.6 million or so. Many ordinary Chinese families now own cars and China's position in the global automobile market has evolved into the world's largest auto market. By the end of 2009, the following automotive industry executives have shown full confidence in China's future automobile market: Renault - Nissan global CEO Carlos Ghosn, Dongfeng production Deputy General Manager Ren Yong, Shanghai GM General Manager Ding Lei, and Sales Manager of Changan Ford Company, He Junjie. However, is China's automobile market destined to be successful over the next decade? Let us take a look at what kinds of challenges we’ll have to face in this decade that has just begun.

 
Challenge 1: Social and environmental sustainability

We have a dream for the 21st century: Every Chinese household, like American  households, will have their own cars; the Chinese people will be the same as the ordinary people in Western countries,  building their lives around the wheel; the Chinese people also start a family outing by driving cars and visiting relatives over the weekend.
Mother Earth
The first decade of the 21st century and the rapid development of China's car market have made so many Chinese people's dreams become a reality. In 2009, China's car ownership reached 60 million or so. In metropolises such as Beijing, Shanghai and Guangzhou, even in third-line cities such as Yichang, Wuhu, Jiujiang, owning a car is no longer a dream.

However, the increasingly severe environmental pressure has sounded the alarm.

Exhaust pollution, noise pollution, the greenhouse effect, carbon emissions...... Chinese society has gradually moved into an auto age which has encountered a series of environmental problems that are unbearable for the Chinese people. In 2009, China's vehicle ownership is just over 60 million, meaning  that only 5% of the population own cars. What will happen to the environment when ownership catches up to the situation in America?

2010 to 2020 will mark the gap between the temptation to enlarge the car market and the harm this will caue the environment. So China's automobile market will face a huge challenge, it needs to make prudent and responsible choices for the future.

 
Challenge 2: Urban transport tolerance

If we say that in the next decade, social and environmental pressures will not reach the edge of collapse, then in those citiesTraffic Jam with a relatively high concentration of cars, restrictions on vehicle growth on account of the urban ecology, will become a reality.

Nowadays, a growing number of Chinese urban residents have already tasted the distress of traffic congestion and parking difficulties. At the same time we happily declared "car era", poor urban planning has also forced us to step into the "traffic jam era". Beijing, Shanghai, Guangzhou, Shenzhen...... traffic congestion in these first-line cities is no longer news, while free flow of traffic is usually taken as big news. Now, more cities are beginning to enjoy "preferential treatment",-the cities' road construction and parking planning have become the biggest reasons for restrictions on car purchases. And if these problems are not resolved satisfactorily, the city's automotive consumer market in China will be finf itself in an inevitable decline.

 
Challenge 3: Deterioration of driving environment

Stop!In addition to the deterioration of the natural environment, the deterioration of the driving environment could also become one of the important reasons for the restrictions on buying a car. In 2009, the related authorities of Anhui Province issued a directive requiring drivers to have a bank card in their possession at all times. so that a fine can be imposed. Traffic management laws are making the roads an inconvenient place to be.

 
Challenge 4: High oil prices and refueling difficulties

Gas stationIn 2009, the National Development and Reform Commission made eight adjustments of domestic refined oil prices within one year. After this round of adjustments, in the retail market, 97# gasoline led the breakthrough to 7.09 yuan / liter. China has entered the era of high-oil prices.

In fact, every time the domestic oil prices have been adjusted, the automotive market has gone volatile. It stands to reason that if oil prices "break 10", consumer enthusiasm will decline greatly.

Apart from the effect of high oil prices on car owners, with the increase in vehicle ownership, refueling difficulty may also become another important reason for the restrictions on car sales. There was a phenomenon of difficulties in fueling in Guangzhou, in 2006, making us linger in fear when we recall this period.. If allowed to grow unrestricted, the car market is likely to face similar difficulties in the future.

 
Challenge 5: The burden on car owners

AutomobilExpensive parking, expensive car repair, use and other issues will be a heavy "mountain" on the back of the car owners. In the city center areas, it is no longer news that parking space is dearer than the car itself, and in some residential districts, parking spaces can cost more than 2 million yuan. Such a heavy burden is clearly an unbearable heavy burden for the continued growth in automobile consumption.

 
Challenge 6: Improved city bus network

TrainAmong all restrictions of China's auto market in the next decade, this "challenge" can be regarded as the only appreciated one. During the next decade, China's urbanization process will further accelerate; the city's infrastructure will also be supporting the further development. Subway, light rail, rapid transit and other urban public transport networks will also be further improved. Inner as well as inter-city public transport, will reduce the dependence on private cars for urban residents. It is easy to imagine, between clusters such as the Yangtze River Delta, Pearl River Delta, Beijing and Tianjin cities, what an impact the public transport system will have on the car market. By 2020, China will have almost all of the provincial capital-level cities connected by subway, light rail and other rail transportation means; Guangzhou, Beijing, Shanghai's urban rail transit system will reach even more than 400 kilometers - so well-developed urban rail transit system will further reduce the desire of consumers to buy  cars.

 
Challenge 7: The new energy technology

petroleum energyIn the next decade the traditional oil-based petroleum energy will encounter more severe resource depletion. The human search for alternative energy sources will accelerate further, which means that the traditional internal combustion engine technology, as the representative of the conventional cars, will face transitional pressures. Unfortunately, we are still waiting for a significant breakthrough in this field.

 
Challenge 8: Unpredictable policies

golden ten yearsIf we say that before 2009, the automotive market never felt the impact of policies by the state, then in 2009 several exotic policies launched by central government did teach a thorough lesson to the automobile market: policy decisions are likely to be a key factor to auto market development. Starting this year, it’s believed that as long as someone hopes to dig some gold from the Chinese automotive market, he has to put an important focus on the future direction of the judgments of the national policy.

To some extent, China's automobile market from 2000 to 2009 that staged the auto market "golden ten years" are closely related with the orientation of national policies, but in the next decade, we will be faced with a series of pressures in car era - energy, environment, transportation and others. Automobile policy, will certainly impact the development of the automobile market.

 
Words & Phrases
Chinese Transcription Part of speech Meaning
挑战 tiǎo zhàn Noun, V. challenge
可持续性 kě chí xù xìnɡ Noun sustainability
油价 yóu jià Noun oil price
地铁 dì tiě Noun subway
新能源 xīn nénɡ yuán Noun, Adj. new energy
政策 zhènɡ cè Noun policy
补贴 bǔ tiē Noun, vt. subsidy, subsidies

 
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