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(China Daily)
Updated: 2009-10-21 08:24

The great fanfare with which Chinese automakers yesterday celebrated their production of the 10 millionth vehicle this year surely speaks volumes about their pride and joy.

Only about half a century after its first vehicle rolled off the production line, China now becomes the third country in the world to boast an annual auto output of more than 10 million.

For Chinese automakers and policymakers, this symbolic event represents a remarkable feat of industrial development.

However, for numerous Chinese consumers who are eager to have their own cars, the country's huge auto manufacturing capacity makes up only part of the situation to realize their auto dream.

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If the tremendous potential of the domestic auto market is to be fully tapped, both Chinese automakers and policymakers need to try harder to help foster a domestic automobile culture that is both environmental friendly and consumer centered.

The fact that Chinese consumers have bought more new cars in the first three quarters of this year than the whole of last year bears full testimony to the growth potential of the domestic auto market.

With a penetration rate of cars still accounting for only a fraction of that in many developed countries, it is almost certain that China's auto output can rise further to make the industry a key growth engine for the national economy. Since enthusiastic Chinese car buyers can take automakers by surprise even in such a year of global downturn, it seems that one should better not venture to predict China's peak annual production figure.

Yet, in the mean time, Chinese automakers should not take the surging domestic demand as a guarantee of their future success.

If they want to excel not only in size but also in strength, they must make their growing manufacturing capacity a stepping stone to develop new models that can better meet the need to save energy and protect the environment.

In the foreseeable future, it may be not the number of cars produced but the amount of energy saved and emissions reduced that will define an automaker's competitiveness. Chinese automakers should definitely do their best to win the race to go green.

For that to happen, Chinese policymakers have to do more than simply cutting sales tax to boost domestic demand for new cars. The far more important tasks for the government at least include not only increasing subsidies for green vehicles but also redesigning urban traffic systems.

Poor traffic systems have stood out as an increasingly serious problem, especially in some big cities. Policymakers can no longer focus on encouraging auto production and sales while leaving more and more drivers to negotiate the roads at their own inconvenience. The gap between urban traffic management and unchecked increase in the number of cars needs to be narrowed as soon as possible.

(China Daily 10/21/2009 page8)