Fu Hui: "Unstoppable" 17 Million

With the pursuit of 17 million units of sales in 2010, Chinese cars have shown an uncontrollable excitement. Whether it is the entire vehicle manufacturer or various service providers around the vehicle manufacturer, they are captured by the energy released by the consumer market. There is still much potential in the Chinese auto market and it is the next focus.

However, when the sales volume of 17 million vehicles gradually surfaced, there were two kinds of forces at the market level that contained Chinese cars. One force is the blockage of the overcapacity crisis in China's autos. One is the congestion in China's large and medium-sized cities and the reflection on China's automobile development and urban planning in China.

For the first type of force, officials from the National Development and Reform Commission first started to say that there is a danger of overcapacity in China's auto capacity planning. Although this is not the first time that a Chinese car has heard such a statement, it still has an impact on the industry, and the voices of various disputes are fluctuating. Then there were officials who denied it. After that, this statement became a source.

The latest argument about excess capacity came from officials from the China Automobile Industry Association. On October 18, 2010, Dong Yang, deputy chairman of the China Association of Automobile Manufacturers, said in an interview with the media that there is no excess crisis in the Chinese auto industry. In fact, up until now, whether China’s autos are surplus or not, neither the government nor the various association organizations have provided comprehensive measurement standards. All of these are based on the analysis of various self-produced data.

Just after the debate was over, there was another new policy that brought irritation to the auto market. On October 12, 2010, the State Council Executive Meeting of the People's Republic of China discussed and in principle passed the "People's Republic of China Taxation Law for Vehicles and Vehicles (Draft)." The policy divides the taxation of vehicles and boats into seven gradients, which are taxed in accordance with the displacement. According to the displacement, the automobile has established a tax standard of 450 to 7200 yuan.

This policy has already been debated several times before. As to why it was proposed at this time, it is worth pondering. At the same time, there are different views on whether the fees are based on displacement as the main reference. Although the basis of this policy is energy conservation and emission reduction, this is not reflected in the charging standards. In particular, for 1.6L and below models, the taxes that they are required to pay are inevitably increased. Because the prices of products at the same level of displacement vary among companies, the fees are the same.

Regardless of the background of these disputes and policies, I would rather see it as the root cause of the suppression of Chinese auto consumption. The speed of development of China's auto consumption market has exceeded all expectations in the past 20 years, as if the controversy surrounding whether cars should enter the family in the 1990s is like a myth.

The arrogance of China’s auto consumption and the direct social problems it has brought have begun to reach the outbreak phase. This is the origin of the second force. The most obvious example is the congestion caused by cars. This poses a great challenge to China's urbanization. Recently, the most influential one is Beijing, the capital of China.

In August 2010, the congestion of the Beijing-Tibet Express occurred in an unprecedented style. The time of congestion and the length of congested vehicles all set a new record for traffic jams in China. Its pressure on China's urbanization and automobile consumption has pushed the Chinese car to a new position. In early September 2010, this congestion was eased. Immediately afterwards, on September 17, 2010, a light rain once again caused a peak of congestion on 140 roads in Beijing and created a new record of Beijing congestion.

This scenario not only occurred in Beijing, but also in many cities such as Shanghai, Guangzhou and Chengdu. The more economically developed and the more urbanized the city, the greater the chance of congestion. Of course, this is not caused by urbanization itself, but there are problems surrounding the supporting design ideas of urbanization. Unfortunately, in the face of such problems, urbanization designers have not fundamentally solved the problem, let alone rethinking their original design ideas.

Nowadays, the frequently mentioned measure to solve congestion is to collect various fees from the consumer end of the car and increase the cost of the car used by the consumer to limit the consumption of the car. This is indeed a way, but is this the optimal way? If this is the case, if the government did not allow cars to enter Chinese families at the beginning, such a problem would not arise at all. Similarly, if such an approach does inhibit automobile consumption, leading to a sharp drop in car sales, and making the industry return to the 1980s and before, will the government reintroduce policies that stimulate automobile consumption? Obviously, the owners of administrative power did not find a solution to the problem, or did not have to solve the problem at all.

In any case, the operation as an expedient measure began one after another. After inadequate market measures failed, Chinese cars habitually returned to non-market methods. Containing car consumption has become an important way. To be sure, as long as China’s economic growth remains at its current pace, no one can block the flood of Chinese automobile consumption that has reached 17 million or even higher dams.