15m Or More Cars In China. How It Affects Peak Oil And Global Warming

Bertel Schmitt
by Bertel Schmitt

It’s definitely official now. The last word in Chinese vehicle sales has the China Association of Automobile Manufacturers (CAAM,) and the CAAM has spoken. Vehicle sales in China last year rose 46.2 percent to 13.64m units. This is not surprising, but it is nonetheless reassuring that the 13.6m number TTAC had reported last week was only 40,000 short. It is equally official that China is the world’s largest auto market, ahead of the U.S.A. by 3m units, more or less.

Vehicle sales in December alone rose 91.7 percent from a year earlier to 1.41m units in China, the CAAM said. Passenger car sales jumped 88.7 percent in the last month to 1.1m units. Full-year 2009 China passenger car sales are up 52.9 percent in 2009 to 10.3m. If passenger cars alone would count, then the truck and SUV happy USA would look like a 3rd world country: According to Automotive News [sub], only 5.7m new “passenger cars” drove off U.S. dealers’ lots in 2009, slightly more than half of what the Chinese bought.

Will the sales boom continue in 2010? Not as mad as in 2009, expects the CAAM. The manufacturers association expects growth to continue at a more moderate pace of 10 percent. This would mean 1.36m units in additional sales, or a total of a little less than 15m. Merrill Lynch is a little more bullish and thinks that the Chinese market will grow to 15.5 million vehicles this year, the Nikkei [sub] reports. A horrific thought to those who are scared that Chinese will use all our oil, and that melting polar caps will destroy the value of our waterfront properties. Wait, it’s getting worse.

China is known for low-balling their projections. By the end of 2008, the CAAM had projected a moderate rise of 5 percent for 2009. A little later, the target was revised to 10m cars for the year. Double, sometimes triple digit growth rates put that target in the round file.

Dong Yang, executive vice president and secretary general of the China CAAM pointed out that auto sales in China over the past 15 years have grown an average 16.7 percent annually. In the worst times of carmageddon, 2008 sales were still up 6.7 percent from a year earlier. Previously, Rao Da, general secretary of the China Passenger Car Association, had said that auto sales in 2010 could grow by another 20 percent so long as China’s economic recovery continues and oil prices stay stable. The CAAM plays it safe and projects 10 percent.

Anyway you slice it, China should close out 2010 with 15m, 16m, or more cars sold.

Since comments about peak oil and pollution are being cued up as I type this, some items to remember:

Air quality: The faster smoke belching vehicles are replaced by modern cars, the better for the environment. Beijing doesn’t allow anything less than Euro 4 into the city, with amazing results for the air quality. China-wide, Euro 4 will go into effect this year. To get the polluters off the road, China is stepping up its Cash for Clunkers program in 2010, and offers between US$733 and $2635 to those who retire their old cars. Increasingly, high polluters will be banned from big cities. Before Beijing was declared off-limits to high-emission vehicles (brand marked by a yellow tag,) they were responsible for 50 percent of the pollution.

Peak oil: According to Edmunds, China is targeting a fleetwide average of 42.2 mpg by 2015. Edmunds: “That’s almost 19 percent more than the 35.5 mpg corporate average fuel economy by 2016 that President Obama announced for the U.S.” Fuel economy for China’s new-car fleet (including SUVs and minivans) already averages 36.8 miles per gallon. In the U.S., the present CAFE standard is 27.5 mpg for cars, 23.1 mpg for trucks.

Now who’s the biggest oinker of ’em all?


Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • 50merc 50merc on Jan 12, 2010

    Right, VWW12. If oil was bread, we'd buy it from other countries because our farmers disturb the soil when they plant wheat. Also, many people don't realize when they see "number of barrels of recoverable oil" that means "number of barrels of economically recoverable oil at a given price." In effect, the higher the price, the more oil is "there"! And if the price gets too low to make a profit extracting it, the well gets shut down. Regarding the current anti-Climategate spin (100,000 rpm), I understand it because I'm in the same predicament. I've invented a perpetual motion machine, but I can't tell anyone how it works because then they'll prove me wrong!

  • Neb Neb on Jan 12, 2010

    Is China no longer using leaded gas?

  • Wjtinfwb "If I had asked idiot traitors what they wanted, they would have said faster horses".... What they wanted, vs. what they'll actually pay for are clearly two different things. It's not hard to want the vision of EV's the Biden admin sold everyone; inexpensive, fast charging with long-range, charging on every corner, minimal impact on the environment. The government delivered none of that. They threw automakers under the bus at the last minute after many of them made huge investment in tech, plants, R&D. Then Biden and his hapless bunch just walked away, built no charging stations, no support for natural resources and doubled down by stoking the labor fires increasing automakers costs substantially. EV's are absurdly expensive for the utility they provide and time is demonstrating their resale value to be in par with a 80's GM diesel wearing a Yugo badge. Sorry, it's not the consumers job to make a fairy tale come true. Making and selling cars is extraordinarily capital intensive, the automakers aren't throwing good money after bad betting on a senile old man who has delivered on none of his promises and is rapidly making himself irrelevant in the national conversation.
  • Fred As a British Car Fan I liked them, but then I sat in one and changed my mind. I like the unique looks of the newer ones.
  • FreedMike Not much to look at, but these were sweet to drive.
  • EBFlex Ford finally making a good decision although they should shut down their EV operations and investment all together. Why lose that money too?
  • Mike Lol. This is the king of suvs. And its made by GM.Why is everyone trashing it?Top of its its class for a quarter century.
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