China overtakes the U.S. in monthly car sales: What the … ?
February 11th, 2009 by Kent KedlQuick. Look out your window. Do you see any flying pigs? Talking elephants? Politicians confidently making decisions and executing them? Do you see ANYTHING out of the ordinary?
No? Really? That is strange … because here in China, we are seeing some really weird stuff. A report came out yesterday announcing that, in January of 2009, monthly automobile sales in China surpassed monthly auto sales in the U.S. — 735,000 new cars were sold in China last month against 656,976 vehicles sold in the U.S. (note the specificity in the U.S. numbers and the more general numbers in China … get used to it!). Experts far and wide were very quick to point out that this is an anomaly and that, while China is the world’s #2 market for car sales, it has historically been far behind the U.S. market and still will need some time to catch up. The overly-depressed market in the U.S. (last month’s car sales were down 37% from the year before) and the bleak consumer spending outlook contributed to last month’s perfect storm. Net-net: we don’t have a new champion yet.
So when I say something “weird” is happening, I am not referring to the data – what is shocking is that we are talking about this at ALL; that we feel compelled to say “though the data is right, its not what you might think”. To even voice the position that China’s car market could even THINK of surpassing the mighty United States of Automobiles is just crazy talk! When I first came to China in the mid-80s, there were so few cars on the street that you’d have to work really hard to get hit by one. Bikes? They were like mosquitoes and you were constantly slapping them away when they buzzed near you. I am sure they had taxis, but I don’t think I even saw my first one in Shanghai until the early 90s (and being a dirt-poor teacher at the time, didn’t ride in one until much later!). And now, here we are, talking about even the POSSIBILITY that China could overtake the U.S. in car sales.
These are CARS we are talking about, the very essence of what it means to be an American! Baseball, hot dogs, apple pie and behemoths burning fossil fuels – those are almost constitutional guarantees if you are Born in the U.S.A. An entire generation in the 50s grew up in automobiles (and some of their children were conceived in them). Songs were written, movies made, books published about cars. A national highway system cemented the American psyche as Big, Bad and Bold and the open road and cheap gas fueled a uniquely American sense of freedom – be anything, go anywhere, do anything. To say that Highway 61 led to a neo-con Iraq policy might be hyperbolic, but it is not necessarily untrue.
To think that – at some point in the future – the U.S. will lose bragging rights as the “owner” of car culture is, to me, quite shocking. If you would have asked me 20 years ago when this would have happened, I would have thought you were completely nuts – heck, even 10 years ago I would have thought you loopy. But now, not so much.
Ultimately, though, this is not about cars. This is about the phenomenon that is China and what the rapid growth of the auto industry here indicates – that, given time, China will be a global leader in just about any industry or business you could possibly imagine. End of story. Think about the most unlikely product or service for China to be a global leader – hair gel, pain relievers, financial services, basketball. EVERY one of those is nearly guaranteed to have a huge market here (whether or not one can create a BUSINESS around that market is another question altogether). And foreign companies that are waffling now on “shall we, shan’t we?” do something about China, to find their place here, mark their territory and start growing– well, these companies will soon find themselves pushed off to the side as the Chinese Monster Truck starts to really roll.
The crisis of both economy and faith that hangs over the U.S. now makes it even more imperative that companies figure out what to do about China, because it is only going to get more challenging. Yes, China still has HUGE problems and MASSIVE gaps in their economy and the way they do business here – but they ARE growing and will continue to do so. And like the foreign auto companies (GM, VW, Toyota) whose only bright spot is their China business, they had to get in 10 years ago to take advantage of the market now.
So the world is not completely crazy yet. Pigs are not flying. But give it time and they just might be driving…
