EDITORIAL: China's auto industry

From January through October, China's automobile output and sales both exceeded 10 million units. The figures could each top 13 million by the end of this year, which would make China the world's top vehicle maker as well as largest sales market for the first time. Currently, the United States leads the world in sales, and Japan in production.

New vehicle sales in China grew sixfold in the last decade. In sharp contrast, the U.S. market shrank rapidly after the global economic meltdown forced General Motors Corp. and Chrysler LLC to file for bankruptcy. Japanese automakers, which had depended on the U.S. market for growth, also slumped.

China is expected to overtake Japan in terms of gross domestic product next year at the earliest--an achievement befitting a nation that is now seen as a new engine to drive global economic growth. But given the grave impact of a bloating Chinese auto market on energy resources and the environment, the situation signals the urgency of technological renovation to shift to non-gasoline cars.

China's Communist Party and government have actively promoted the auto industry for its huge potential to create jobs and push technological development in a broad range of sectors. Expressways built in China over the last decade are more than six times longer than the total in Japan.

When China's annual vehicle production reached the 10-million mark for the first time last month, the occasion was celebrated with a new model of the Jiefang (Liberation) truck rolling off the assembly line at state-owned China FAW Group Corp.

Passenger cars became the market mainstay a few years ago. Rising income levels in China have made them affordable to more citizens. With the emergence of domestic automakers, inexpensive passenger cars have become available. The government has been promoting sales with tax breaks and subsidies for buyers.

In 2008, China's per-capita GDP topped $3,000 (about 267,000 yen)--the watershed that turns a nation into a mass consumer society. Japan got there in the early 1970s.

With car ownership still less than 5 percent today, China is on the threshold of motorization.

According to International Monetary Fund projections, China will have roughly doubled its per-capita GDP by around 2015. New vehicle sales at that time are expected to increase to 15 million units, comparable with sales in the reviving U.S. market. The figure in China is estimated to reach about 20 million around 2020.

That's effectively double the scale of today's Chinese market. And if 20th-century-type gasoline cars are still the mainstay, the massive energy consumption and environmental destruction that will result are too horrendous to even consider.

Beijing is aware of the need to save energy and protect the environment if the nation's auto industry is to keep growing. The Chinese government has taken measures, including more stringent fuel-efficiency requirements, tax breaks for small cars and support for the development of electric vehicles and other green cars. It has also begun improving rail, subway and other mass public transport services. These efforts must be enhanced.

The Chinese auto market has become a battleground where Japanese, U.S., European, South Korean--and now Chinese--automakers are engaged in cutthroat competition.

To survive in this burgeoning market, we hope Japanese makers, which have been leading the world in gas-electric hybrid and other clean-car technologies, will remain leaders in the "green revolution" by using their technological expertise to offer affordable green cars and help the auto industry grow without sacrificing the environment.

--The Asahi Shimbun, Nov. 17(IHT/Asahi: November 18,2009)