Car Ownership in China – Who is Buying?

With the figure of private car ownership in China increasing every year (30 million in 2009), it's worth taking a look at who is actually buying these cars. China's 364,000 millionaires can be count on to own at least several each; the modest millionaires with only one car compensated by the collections of men such as Wang Chuanfu, China's richest man and an important figure in the automotive industry. The remaining 29 million or so is a figure firmly in the hands of the up-and-coming middle class. Car ownership is as much a symbol of status and wealth in China as it is in any developing country. This idea is reflected on the streets: even though Chinese traffic laws are as clear and strict as they are in Europe or the US, pedestrians and cyclists often find themselves at the bottom of the food chain. For the younger generations living in the cities, it is safe to assume that those who can afford to buy a car will do so. So what is keeping figures relatively low? 30 Million cars on a population of 1.3 billion is not a lot by anyone's standards.

Part of the reason is founded in nuance. Private car ownership refers to the individuals that purchase and own a car in their own name, so they can drive to work or take their kids to school. But there are far more cars in China than just 30 million. China's state-run news agency Xinhua has published figures stating there are over 160 million people licensed to drive cars nationwide. This is, of course, including the millions of taxi, bus, and truck drivers that make up a large part of the traffic anywhere in China. Yet there is also a significant portion that can be attributed to people driving company cars or shared ownership. Most small businesses in China, especially restaurants and shops, rely on supply from outside the cities where their customer base is located. However, a truck is oftentimes more than these businesses need and so they employ a single van. In the more remote areas of inland China, there is often no state-run public transport that connects the many villages dotting the mountains and countryside with the rest of the country. In these situations, groups of villagers or entrepreneurial individuals will often pool their money and purchase a van to make the trip once or twice a day. Additionally, as anyone who has ever visited knows, the amount of small businesses in China is staggering, with almost every roadside building a shop front. With so many 'lao ban', bosses, the distinction between private and company car ownership is sometimes blurry at best.

That goes a long way towards explaining the numbers. What has really pegged the number at approx. 2% of people in China owning a car is the fact that even if someone can afford a car, it is simply not that easy to actually obtain the right to drive it. Apart from getting a driver's license, the procedure of getting a license plate for your car in China can require painstaking amounts of time, effort, and money. In cities like Shanghai, already congested with traffic on even the best of days, obtaining a license plate can cost as much as your car did and is often nothing more than a lottery, with hundreds of people vying for a few available plates. The distribution of license plates is regulated on a provincial level and so prices and requirements different through China, but so does the local traffic police's tolerance of 'outside' plates. There are rules prohibiting drivers with non-local license plates to enter certain areas of cities within peak times or even at all.

Car ownership in China is certainly increasing, but it is important to understand what can hold it back and how to interpret the figures. Many cities are struggling to get their infrastructures to allow higher volumes of traffic and until that has been sorted, it is likely that regulations on ownership will remain tight.



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