At our peak auto purchasing capacity, Americans bought an average of 17 million cars almost every year from 1997 to 2007. That means in just ten years, 170 million cars were added to the road, and far fewer were scrapped. In fact, 2009 was the first year in four decades where Americans scrapped significantly more cars than they bought. 14 million autos were sent to the scrapyard (helped in no small part by Cash for Clunkers), while Americans bought just 10 million new vehicles.
Over in China though, the auto industry is going through unprecedented growth. After outpacing U.S. sales in 2009, analysts are estimating Chinese consumers could buy between 15 and 17 million new cars in 2010. And that number is only going to grow in the years to come.
In 2009, U.S. car and light truck sales totaled just 10.4 million vehicles. China bought 30% more vehicles, a total of 13.6 million vehicles. This has to do with an increasing Chinese middle class and a burgeoning population of over 1 billion people. U.S. auto sales reached a peak of 17.4 million light vehicles in the year 2000, around when we were mostly buying SUV’s because the price of gas was so low. That, as we all know, didn’t last.
Many analysts are confident China will see a 25% growth in auto sales in 2010. Indeed, in March there were 1.7 million cars sold in China. After this surge, sales slumped… to just 1.5 million. Over 6.1 million cars have been sold in the first four months of 2010, and if China can keep this pace up, it will easily surpass 17 million cars sold, and may even hit 18 million or more. Meanwhile, U.S. car sales are likely to hover in the 10-11 million vehicle range as our culture seems to be shifting away from buying new automobiles. We could even shift away from cars if all of these bold public and mass transit systems ever materialize.
Other analysts are more cautious though, and warn that China may experience its own car gluttony. They say 15 million vehicles sold is a more realistic number as sales taper off as the year goes on. 15 million, 18 million, does it really matter? Next year, the numbers are likely to breach 20 million cars sold or more. If Chinese car buying trends follow what happened in America from 1997-2000, China could see annual sales of 30 million vehicles or more in the coming decades. I wonder where they plan on getting the oil for all those autos? There is only so much to go around, after all. Let’s hope they kickstart their electric car program sooner, rather than later, or they might end up with a crude oil hangover.
Can you imagine what traffic jams in China might be like in 20 years?