Beijing Runs Out Of Cars, Beijingers Mob Dealerships

Bertel Schmitt
by Bertel Schmitt

Beijingers who shop for a car increasingly find themselves SOL. Dealers report a shortage of cars. Especially scarce: inventories of Volkswagens, China’s largest passenger car brand. “I have to turn to another auto brand for not being able to get a single car of Volkswagen’s for five months,” a customer named Li Guang complained to China’s Global Times. The paper reports delivery times of 3 months for China-made Polos, Sagitars (formerly known as Jetta) and Magotan (known as the Passat B6 in other countries.) Now, Beijing’s car dealers are pouring more oil on the fire. The rumor mill is ablaze with talk that Volkswagen might postpone its car supply to Beijing’s auto market for January next year, because Beijing might launch new car registration limit policies at that time. The result?

A run on dealerships. Other auto brands in Beijing also face inventory shortages. Sales of GAC-Honda’s City in Beijing exploded in November, and local dealers had to get vehicles from other cities. On top of it, Honda, Dongfeng Peugeot and Dongfeng Yueda Kia are planning a dealer cull.

In order to reduce the traffic pressure in Beijing, there is one day in the week where my car must stay in the garage. This is based on a byzantine system that is based on the last digit of your license plate. It increased car sales even more: People bought a second car with a different digit. Beijing drowns in cars. Every day, more than 1000 cars are newly registered in the city. Last year, Beijing added more than 400,000 cars. Now the rumor is that Beijing will only register 100,000 car plates in 2011.

There is precedence: In Shanghai, there is only a set number of new license plates available (between 5000 and 6000 a month) and they are auctioned off. A plate can cost more than a small car: $5,000 to $6,000 a plate are not unheard of.

Not a peep from the city government on this. Usually, impending measures are being discussed for a while. It usually starts with a professor of a famous university to make a suggestion. Experts weigh in with interviews and op-ed articles. Chatrooms and blogs go back and forth. The pulse of the population is taken, and if there is too much opposition, the measure is quietly scrapped. Nothing of that kind on the radar screen. My contacts at Volkswagen Beijing likewise deny any knowledge of such a scheme.

Which brings the usually well informed Global Times to the conclusion: “Experts say the rumor might be auto dealers’ plot due to sales target pressure.”

Is it Snopes-material? Or is it true? We’ll know in January. My take: Snopes.

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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  • Trend-Shifter Trend-Shifter on Dec 04, 2010

    Two of my employees in Shenzhen are buying cars before the end of the year. They tell me it is because of government incentives that will end at the end of the year. From their description of the incentives it is basically a program to entice purchase of a vehicle that gets good gas mileage & emissions over older models. So this could be a factor on the run on dealerships. About brands, both of these employees are buying VW and have the same opinion on cars. That could be because of our collective. (you will be assimulated) Here are a few generalizations they gave me about their automotive opinions. * USA cars are very safe and well built, but use too much oil. (gas) I have heard this same comment countrywide in China. USA automanufacturers need to debunk this in their marketing. * German cars are safe, very high quality, and provide status. * Japanese cars are not safe and the quality is now only so-so. They mention the unintended acceleration issue with Toyotas as case in point. * VW fits the bill with price, gas mileage, perceived status, and quality. * They would not buy a Chinese brand car, only a joint venture car. (no Geely, no BYD, etc) * We drove in a Mazda 2 last week. I said I liked the way it drives. (my inner enthusiast talking) They said it was the worse car they ever rode in and hated the look. It gave no status. Myself I was suggesting the Cruze to them. They said they considered it but the cost was too high. They then said they would buy a Cruze to make me happy since I am their boss! Can you believe that? I told them not to do that, I just liked to talk about cars.

    • Mpresley Mpresley on Dec 05, 2010

      Does SZ still have the Bentley dealership? If so, I suggest that would be the way to go.

  • Forraymond Forraymond on Dec 05, 2010

    My apologies if I offended your sensibilities by rebutting the snarky comment above. I do enjoy the comments almost as much as the articles. The site continues to get better as it grows. Thank you for this automotive news/opinion outlet.

  • Ravenuer Looking forward to it!
  • Daniel J I love my mazda 6. It's getting harder and harder to drive it around where I live as municipalities fail to repair roads. SUVs are just easier to drive with all of the potholes.
  • 1995 SC On the plus side, I found a sedan I want to buy
  • Teddyc73 As I asked earlier under another article, when did "segment" or "class" become "space"? Does using that term make one feel more sophisticated? If GM's products in other segments...I mean "space" is more profitable then sedans then why shouldn't they discontinue it.
  • Robert Absolutely!!! I hate SUV's , I like the better gas milage and better ride and better handling!! Can't take a SUV 55mph into a highway exit ramp! I can in my Malibu and there's more than enough room for 5 and trunk is plenty big enough for me!
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