With the sharp increase in car ownership in recent years resulting in traffic congestion in downtown areas, Beijing can no longer give a shot in the arm to automakers.
The municipal government should come up with a comprehensive plan to regulate the situation. Otherwise, a boom in sales, sooner or later, will make traffic too heavy for the city to bear.
It was reported that the number of cars owned by Beijingers has already exceeded 3.5 million and is increasing by 1,000 cars a day.
The fact that it took only a year for Beijing's car ownership to jump from 3 million to 3.5 million may delight both domestic and foreign automakers.
As the world's second-largest vehicle market after the United States, international auto giants certainly count on fast-growing Chinese sales to help drive revenue growth as sales elsewhere weaken.
Domestic automakers are no less desperate to tap into the vast potential of Chinese consumers.
After several years of more than 20 percent growth, Chinese automakers have experienced a sharp drop, more than 10 percent year on year last month.
Given the importance of the car industry to the national economy, it is no surprise that the Chinese government will consider ways to support struggling automakers.
However, for urban planners, especially those who have to face the constant headache of how to deal with traffic jams, new incentives for car sales are not very pleasing.
Beijing is not alone among major Chinese cities suffering from heavy traffic. Yet, the centripetal force that guides Beijing's urban expansion has made it particularly difficult for the city, which probably boasts the biggest car ownership in China, to reduce traffic jams in downtown areas.
Admittedly, policy incentives that the central government will roll out may be effective in reviving car sales for the moment.
But the problem is that, continuous expansion of car ownership in cities like Beijing can aggravate traffic problems more rapidly than expected and eventually force consumers to back-pedal on buying cars.
And declining consumer interest in cars due to poor traffic conditions will prove much harder for automakers to survive than the current economic slowdown.
If policymakers want to boost car sales to sustain Chinese automakers' development as well as the country's economic growth, they must do more to improve not only conditions for car sales but also the driving environment.
For Beijing, that means the municipal government should draw up regulations to discourage driving in downtown areas while doing their most to provide more and better public transport services.
(China Daily December 16, 2008)
