No License? Chinese Police: "We'll Teach Ya"

The Chinese government wanted to create demand for an extra million vehicles per year with their “cars to the countryside” program. It goes like this: farmers who replace their three-wheeled vehicles for light commercial vehicles receive a maximum subsidy of 5,000 yuan ($731). Not enough to spur consumption? “For cost-sensitive farmers, a 10-percent subsidy is enough and would be effective to boost demand,” said Tan Jijia, an auto analyst at Pacific Securities Co. He was wrong. There is another problem . . .

Farmers in China rarely have driver’s licenses. Of the approximately 1.5 bn people living in China, only slightly more than 100 million are licensed to drive a car. Other than in the big cities, which clog daily with traffic, cars can still be an oddity in some rural towns. Even in larger cities more inland the preferred type of a taxi is the backseat of a motorcycle. That became apparent after the “cars to the countryside” wasn’t the roaring success it was hoped.

The lack of licenses won’t deter the Chinese; the Ministry of Public Security will dispatch policemen to the countryside to give farmers easier access to driving license examinations, Gasgoo writes. Even mobile offices for vehicle registration will be set up in rural parts of China. Normally a driving school teaches driving, and police stations issue the permits.

Unfortunately, there are no driving schools and very few police stations in the Chinese countryside. Between 55 and 80 percent—depending on whom you ask and who does the counting—of China’s population lives in rural areas. Even tier-3 cities often lack an essential element to car ownership: car dealers.

This should serve as another indicator that China, for the months of January and February the world’s largest auto market, is largely untapped.