By on October 22, 2009

Beijing at night – worse during daytime. Picture courtesy autonews.gasgoo.com

Yesterday, China’s auto production officially exceeded the 10m mark. You’ve seen nothing yet, opined Dongfeng Motor Co. vice president Ren Yong at the sidelines of the Tokyo Motor Show (which had been mostly shunned by foreign makers.) Peak oil theorists, take a Valium before reading further.+

China’s annual auto sales will likely reach 20 million units by 2015, Dongfeng’s VP reckons, as demand will be growing with rising family income.

Auto sales in China are projected to reach 13m units this year. The fourth quarter is likely to see even bigger increases than the sales explosions of the previous months, as the imminent end of a policy that halved the sales tax on mini cars will herd the last of the undecided into the showrooms.

For the first nine months, total sales rose 34 percent to 9.7 million, with passenger-vehicle sales up 42 percent to 7.2m units.

Beginning in January 2009, China eclipsed the USA as the world’s largest auto market. Even if Ren Yong is too optimistic, the ranking will not change anytime soon. The tracking firm CSM Worldwide sees U.S. auto sales at 11.8m units by the end of 2010, about a million shy of China’s current year number. US light vehicle sales had never seen 20m, and most likely won’t ever.

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28 Comments on “China To Sell 20m Cars In 2015...”


  • avatar
    ohsnapback

    The shift from manufacturing prowess to financial services (monetarily weight-adjusted) in the U.S. has produced a new “normal,” high unemployment rate, and a decimation of the middle class (and the concomitant growing rich man-poor man divide), while in the China, it appears that the middle class as well as manufacturing are growing at a very fast clip.

    When I see images of bustling Chinese factories and roads, it reminds of black and white film of 30,000 workers rushing in the gates of Henry Ford’s Rouge Plant, which was the biggest factory complex the world had ever seen up to that time (and for some time yet).

    A country that produces a great deal, becomes a great deal.

    A country that makes less, becomes less.

    A country that makes nothing, becomes nothing.

  • avatar

    So many cars stuffed into such a relatively small region…so much weight focused there…won’t Earth begin to wobble? Shouldn’t we call Green Peace?

  • avatar
    PeteMoran

    2015? 5 years?!? Auto sales in 5 freakin’ years???

    Tickets in my guess how many jelly-beans in the jar fund raiser only cost $1. We’re building a playground.

  • avatar
    golden2husky

    The shift from manufacturing prowess to financial services (monetarily weight-adjusted) in the U.S. has produced a new “normal,” high unemployment rate, and a decimation of the middle class (and the concomitant growing rich man-poor man divide), while in the China, it appears that the middle class as well as manufacturing are growing at a very fast clip.

    When I see images of bustling Chinese factories and roads, it reminds of black and white film of 30,000 workers rushing in the gates of Henry Ford’s Rouge Plant, which was the biggest factory complex the world had ever seen up to that time (and for some time yet).

    A country that produces a great deal, becomes a great deal.

    A country that makes less, becomes less.

    A country that makes nothing, becomes nothing.

    While I would hardly call what is made in the financial and other service sectors “nothing”, your point is otherwise well stated. It is so easy for us to gloss over the loss of manufacturing jobs when almost all of us Internet warriors here have had little effect, other than to enjoy the era of $45 disposable Chinese-made DVD players.

    When I was in college, our economics professor stated her dismay at the direction things were headed. This was in the mid 80s. The mantra at the time was, of course, education and retraining. She realized the importance of that, but noted that not all people can be retrained, or they may be at a point in their life that they really don’t want to. The loss of manufacturing has made a new underclass of those who once had a solid middle class existence and now have nothing.
    There also is a loss of pride as well. I always felt good when I picked up a solidly made product and saw “made in USA” on it. Now, even if it carries that label, it is usually assembled here from outsourced imported components. Hate to break it to the Harley fans out there, but an enormous amount of what makes a HD motorcycle is not from the USA. A Honda Goldwing is more American (in componentry that is; hold the hate mail). And yet, often on this site you hear actual glee and disdain for those who once worked in manufacturing and are now unemployed. Sad. In this economy today, I can’t imagine anyone out there who doesn’t know of somebody who lost their job, manufacturing or otherwise… Wake up America.

  • avatar
    FleetofWheel

    “Peak oil theorists, take a Valium before reading further.”

    That’s a good line because Western car haters usually have two things holding them back:

    1. They are most comfortable criticizing only US consumption. Their guilt and self-loathing prohibits seeing anything non-US as having fault.

    2. They know they have nearly zero control over what China and India do. They won’t be able to tree-sit or chant to stop tens of millions of Chinese and Indians from gassing up and driving billions of miles. Heck, the Chinese will be even be driving Buicks, whatcha gonna do Friends of the Earth?

  • avatar
    Autosavant

    If tomorrow is just like today, ie, if CHina continues on its rapid econ growth path, sure, there could well be 20 mill by 2015. And many of them will not be $2k tata nanos class, but far more expensive and powerful.

    But if anything goes wrong…

  • avatar
    Autosavant

    “Peak oil theorists, take a Valium before reading further.”

    I have zero sympathy for these utter, serially failed (WORLD peak oil predictions) CHARLATANS.

    Instead of valium, they should have to take an econs 101 class. Repeatedly!

  • avatar
    no_slushbox

    ohsnapback:

    If the Chinese didn’t make our manufactured goods robots would:

    http://reason.tv/video/show/451.html

    And robots would make them better than the Chinese, who are, to generalize based on people that I know who have worked there as manufacturing consultants, a mediocre, thoughtless, creativity lacking group of people, wholly misrepresented by the achievers that have managed to immigrate to the US, and successful only because of they’ve been put in line by a strong, utilitarian government, that, for its own people, seems to come close to Plato’s benevolent dictator. Chinese engineers are completely useless; a Chinese college engineering degree is equivalent to graduating from a suburban US high school and taking AP physics.

    The US is a dying empire, but it is also a nation of immigrants, generally (but with exceptions) those who were smart enough and industrious enough to leave their old countries. China is a nation of left behinds (with some Westerners that they’ve imported to teach them how to do anything).

    The Chinese are, as their strong point, obedient, they don’t ask about the big bags of Canadian and Russian asbestos, they just unpack them and put them into Bertel’s brakes (just kidding, maybe).

    Do not worry, the US isn’t just going to be a country of financial and legal services either; India is quite competitive in those higher level fields and will make sure that we are not stuck with them.

    Eventually there will be wage equalization and US workers will again be able to compete, but at that point there will be no natural resources left and fatalist religious zealots waiting for their reward in the afterlife (either militant Muslims or Evangelical Neocons from the American South) will start a nuclear war and we will all die.

  • avatar
    psarhjinian

    I have zero sympathy for these utter, serially failed (WORLD peak oil predictions) CHARLATANS. Instead of valium, they should have to take an econs 101 class. Repeatedly!

    Peak oil is not an economic issue, but a purely physical one. There’s a finite supply of oil, and a significantly more finite supplies of ethical, domestic, cheap and/or politically-unencumbered caches.

    If China’s (or India’s) per-capita demand ramps up to match that of a western nation, those supplies are going to be more constrained, and they’ll get further constrained as supplies diminish. About the only good thing that could come of this is that, eventually, it’ll fuel the development of more sustainable sources and uses of power.

  • avatar
    psarhjinian

    The loss of manufacturing has made a new underclass of those who once had a solid middle class existence and now have nothing.

    This is a very important point, and one often forgotten in the constant internecine class warfare in the US and Canada. High-paying union jobs, if nothing else, enabled several generations to better themselves in ways that would not and now, no longer are, easy or potentially possible.

    Note that there’s a cost to this wage erosion, especially when you weaken (or don’t have) the social safety net that would backstop this slide. Michigan is currently paying it; so will many other states. The worst part is that we’ve convinced ourselves (or, if you prefer, have been convinced to convince ourselves) that it’s wrong and immoral to have a well-paid blue-collar middle class.

    Instead of asking “Why don’t I have UAW or European benefits?”, we’re asking “How come they get to have them?”.

  • avatar
    rnc

    When watching the “land before time” with my son last night, there is this concept called “The Circle of Life”. The US was once what China is now, the low cost producer goods and creditor of the world, spending the massive inflow of wealth on developing our country. People keep looking at the peak of the american industrial era (50′-60’s) without realizing that’s what it was a “peak” (of course the rest of the developed worlds industry being decimated by WWII helped). At some point the Chinese will peak as well, just as Japan did in the 80’s. And when they peak, there will be billions of indian’s, indonisian’s, malaysian’s, etc. ready to become the new low cost producer and creditors of the world.

  • avatar
    rnc

    Instead of asking “Why don’t I have UAW or European benefits?”, we’re asking “How come they get to have them?”.

    Europeans have them because they’ve accepted that being taxed at 55% to have social benefits (unemployment, education, health and retirement) is worth it.

  • avatar
    John Horner

    The latest issue of Forbes had a cover story on where to move for retirement. The first pick: Paris!

    Why? Reasonable health care costs and a vibrant social life. This hardly squares with the Evil Europe Sucks Life Blood Through Taxation idea.

    http://www.forbes.com/forbes/2009/1102/foreign-retirement-france-italy-best-places-to-retire.html

    When even Forbes is promoting the advantages of retiring to France you know that something is up.

  • avatar
    bwell

    If I recall correctly, US manufacturing output is (or was until the current recession) as high as its ever been. Our share of total world output is going down, but this is inevitable, unless you are proposing that no other country expand their capacity.

    We have fewer workers in manufacturing because it is becoming more efficient. Should we make it less efficient?

    In 1900 most of the country consisted of farmers and those who dealt with them. Now, what, 1% of the population is involved in farming? Are we worse off because of that?

    After World War II we were the only country with any significant undamaged manufacturing capacity. Guess what, we ruled the world. That wasn’t going to last forever.

    Prosperity comes from being productive and making things (goods or services) other people want to buy. We can’t bring back prosperity by paying unskilled people $75-$100K per year to do something that can be done elsewhere for 1/4 of that.

  • avatar
    PeteMoran

    @ rnc

    I have plenty of colleagues in Europe who pay nothing like you suggest.

    Something like this perhaps.

  • avatar
    rnc

    PeteMoran :

    An extensive spreadsheet table comparing income tax “wedges” (as they
    are called by the OECD) from member countries for 2001, can be found
    here:

    http://www.oecd.org/LongAbstract/0,2546,en_2649_201185_1942475_1_1_1_1,00.html

    in a title repeated no less than three times on the same page:

    “Average personal income tax and social security contribution rates on
    gross labour income”.

    The detailed breakdowns (federal tax, local taxes, social security)
    can be seen in the table itself. The “bottom line” figures for the
    countries you are interested in are:

    UK

    The total tax wedge is 29.7% for the average wage earner

    (“average” wage is found in the 100% column — tax wedges for lower
    and higher wage earners are found in the adjacent columns)

    Denmark

    The total tax wedge is 44.2% for the average wage earner

    Germany

    The total tax wedge is 50.7% for the average wage earner

    France

    The total tax wedge is 48.3% for the average wage earner

    US

    The total tax wedge is 30.0% for the average wage earner

  • avatar
    wsn

    Is it really sad that we are not farmers?
    Is it really sad that we are not line workers?

  • avatar
    carlisimo

    1. They are most comfortable criticizing only US consumption. Their guilt and self-loathing prohibits seeing anything non-US as having fault.

    China has tighter mileage standards than we do, if that’s what you were wondering about.

  • avatar
    TonyJZX

    i don’t think it is smart in any possible way… either economically or environmentally or any way you cut it

    i also doubt the chinese govt. will allow such a massive flow of funds out of the country to fund this

  • avatar
    PeteMoran

    @ rnc

    Thanks. Was your link correct? There was a spreadsheet entitled “Sub-central personal income tax rates (general)”.

    No matter, there is abstract from the full report on the site however.

    I’ve ordered the 2007/2008 edition via our resource people.

    The way I read the above (Figure O.2), as an individual your Gross Wage Earnings Paid In Income Tax and Employee Social Security is ~28% in France and ~24% in the USA.

  • avatar
    psarhjinian

    “Average personal income tax and social security contribution rates on gross labour income”.

    The problem with that figure is that it externalizes a lot of what people have to bear anyway, just not through income taxes. Just because it isn’t part of your income tax, doesn’t mean that you aren’t paying for it and aren’t getting value for your money.

    Americans go to great lengths to avoid calling things taxes. Those lengths often include delivering the service very, very badly. I suspect part of why socialism is so bitterly opposed in the US is because when it’s been tried it’s been so badly hamstrung that its failure is guaranteed.

    This is an awful thing to do to the middle and lower-middle classes, because they’re not truly helped by lower income taxes, but are very much hurt by user fees, tolls and the chronic operational underfunding of government.

  • avatar
    psarhjinian

    After World War II we were the only country with any significant undamaged manufacturing capacity.

    Canada. :)

  • avatar
    FleetofWheel

    “China has tighter mileage standards than we do, if that’s what you were wondering about.”

    No, I was wondering how the anti-car zealots will stop millions upon millions of Asians becoming car owners.

    CAFE type mileage standards are not enough to prevent imminent global catastrophe according to the chicken little climate alarmists.
    “got to get people out of their cars…”…to paraphrase Ray LaHood.

  • avatar
    Robert.Walter

    If they are on such a growth-curve …

    And as indicated in another report here on TTAC that they are experts of shamelessly copying Western technology & design…

    All I can say is that, as a matter of survival, the West better get cracking developing a technology that China Inc. can copy, to help cut the incremental oil consumption and polution they are going to create….

  • avatar
    97escort

    Peak Oil “charlatans” can do name calling too. We call those who think that oil is infinite “cornucopians”.

    Classical economics can not deal with depletion of a finite resource which is not easily replaced by a substitute as in the case with oil.

    We saw what happens when oil prices rose last year. We are now in the midst of the Great Recession and as we come out of it a little oil is already making new recovery highs around $80.

    This is the Peak Oil pattern: Oil price increases due to demand followed by demand destruction. Then some recovery, rising oil prices again, and more demand destruction. Rinse and repeat down the backside of the Hubbert Peak Oil curve.

    The U.S. car companies who have few fuel efficient vehicles to sell have suffered the most.

    And they will continue to suffer if management continues in its cornucopian view of oil.

    The Chinese will have a day of reckoning ahead at some point, but for Americans who mostly have the cornucopian view now is our day of reckoning and most are oblivious to what is going on.

    China is buying up oil reserves as fast as it can
    while Americans are busy arguing among themselves about obsolete economic theories.

  • avatar

    And I suppose this explains why Pontiac, and not Buick, got the axe. Or so says the conventional wisdom.

    http://escapefromjersey.blogspot.com/

  • avatar
    PeteMoran

    @ 97escort

    We call those who think that oil is infinite “cornucopians”.

    Yes, but the tradition of Head-In-The-Sand has worked so well on so many issues.

  • avatar
    unleashed

    We are now in the midst of the Great Recession and as we come out of it…

    That’s news to me.
    Silly me thinking we’re on a verge of an economic collapse.

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