Tuesday, 28 February 2012

Car Status in China

The ubiquitous black Audi is the car of choice of Chinese officials
Every other car in Beijing is a black Audi.

It's the car government officials drive (or rather their chauffeurs drive).

Some 80 percent of all state-bought cars are foreign brands, and Audis make up one-third of that.

One time when I was in Beijing a friend told us he bought a car -- a black Audi.

Just as our jaws dropped in horror he said, "Just joking," with a broad smile.

We all had a good laugh.

However the Audi-buying all with other foreign brands will come to a complete halt this year.

A proposal from the Ministry of Industry and Information Technology last week says the 412 models approved for purchase by state agencies this year will be limited to Chinese brands. It's seen as an effort to protect the domestic car industry as they struggle to compete against global producers.

In addition, China stopped offering incentives on investments to foreign carmakers in a bid to stop overcapacity.

"It seems that the China market for cars is closing slowly but surely toward foreign investment," said Dirk Moens, secretary general of the European Union Chamber of Commerce in China. "As an industry you cannot expect to be warmly welcomed outside of your country if at the same time you start closing the industry in your country."

Sounds like another bad sign for Europe.

However, there could be some resistance to this proposal that is up for public consultation until March 9.

"It's such a drastic step I could imagine they could be a bit resistant from the local government procurement side," said Klaus Paur, Shanghai-based head of auto research at Ipsos. "If you're a relatively high-level person, you still want to have an Audi. The brand, the reputation, the standing is all important."

Would a senior government official want to be seen in a BYD or Great Wall Motor car?

Perhaps Chinese officials will be holding onto their current cars for a little while longer...

Meanwhile for some background info, last month The Globe and Mail talked to a taxi driver surnamed Zhao who gave insights into who drives what cars in China:
Toyota sedan – Driven by putongren. Ordinary people. Not so ordinary that they have to use public transport or ride a bicycle, mind you.
Mercedes SUV – Driver Zhao presumes someone who drives one of these ubiquitous (and always black) vehicles is a laoban. The word means "boss," but in this case laoban can mean anyone who recently come into cash and wants to show it off.
Buick GL8 minivan – Wildly popular in China, these vans aren't for soccer moms. To Driver Zhao, someone driving a Buick GL8 is a "xiao laoban," or little boss. Someone who can't yet afford the Mercedes. Just as often, the driver is a professional and the passengers are Western expatriate families with kids.
Audi A6 – Weibo had it bang on, it's the automobile of choice for the Chinese bureaucrat. Seeing an Audi A6 in traffic means you're idling beside part of the country's power structure. As The New York Times put it , the A6's "slick frame and invariably tinted windows exude an aura of state privilege, authority and, to many ordinary citizens, a whiff of corruption." (The Beijing government says there are 62,000 official cars in the city, a figure that seems far too low. The state-run CCTV television station reported last year that the real figure is closer to 700,000.)
Humvees or Ferraris – Driver Zhao says the only people arrogant enough to drive one of these on Beijing's streets are the well-off children of top government officials. As evidence of that, I once saw a bright yellow Humvee rip the wrong way through traffic in Beijing's busy Sanlitun bar district, before proceeding to drive through a red light without so much as tapping the brakes. At least three policemen witnessed the same scene, but seemed to conclude from the driver's brazen behaviour that he was too powerful to be stopped.

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