The fact that rich people are buying expensive luxury vehicles may be good news to automobile manufacturers and the government bent on stimulating the economy, but we should be aware of consequences of the sport utility vehicle (SUV) craze.
Taking advantage of the overwhelming demand for SUVs, car dealers imposed an additional cost of up to 30,000 yuan ($4,418) if drivers wanted delivery during the National Day holiday last month. It meant a Volvo SUV with a sticker price of more than half a million yuan cost an extra 20,000 yuan, while the more expensive 3.5L Mercedes-Benz SUV would set you back an additional 10,000 yuan.
Now the new Audi model Q5 has joined the fray with a whopping sticker price of 650,000 yuan. Although the government raised oil price on Nov 10, the waiting list for the car is long and drivers still have to wait up to six months for delivery.
Amidst the global financial crisis and the increasing oil prices, SUV sales are booming in China while shrinking in Western countries. They are popular among the rich people and have become a status symbol in China.
But more SUVs with larger emissions will put even greater pressure on the environment. They are also large and cumbersome on the roads. Some people perceive SUVs to be safer in the congested traffic in the city. Others may follow suit because they want to be safe. This further squeezes traffic conditions.
Second, SUVs are a waste of money for many people. People buy SUVs for their off-road capability. But what's their use when Beijing's streets are crawling with more cars of different shapes and sizes, and the city is most of the times just one large parking lot?
Third, ostentatious display of wealth by the rich through owning socially visible possessions such as a hummer is just insensitive. The social divide has been rapidly widening in China in recent years, with a greater concentration of wealth and a growing disparity in incomes.
China is home to hundreds of thousands of millionaires who pamper themselves with luxury cars. But it also has tens of millions of people who live in abject poverty. Perhaps the old Chinese virtue of frugality and prudence should be promoted again.
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