World Energy Outlook 2007

develop their own-brand vehicles in the near future. They accounted
for more than 20% of car sales in 2006.
New private Chinese companies: These recently formed companies,
which include Chery, Geely and Great Wall, operate without a formal
foreign joint-venture partner. Their main challenge is to build up
their vehicle design and development capabilities without violating
intellectual property rights. They accounted for 15% of car sales in
2006.
Chinese companies have a price advantage, offering models similar to those
of foreign car manufacturers, but at a price 50% to 70% lower. But Chinese
companies will find it more difficult to comply with new environmental,
efficiency and safety regulations, at least in the short term.
The spectacular growth in the overall vehicle stock in China in recent
years masks huge differences between the provinces (Table 9.7).
Vehicle ownership in Beijing, one of the richest cities, is 133 vehicles per
1 000 people – five times more than the national average and equal to that of
South Korea in 2000. Hunan, the province with the lowest vehicle ownership,
has only 9% of the level of vehicle ownership of Beijing. Differences in personal
income, infrastructure development and urban planning explain the regional
variations. Inland provinces have a higher share of trucks and tractors than coastal
provinces, where cars represent two-thirds of vehicles.
Local policies also affect car ownership. Shanghai, the wealthiest region of
China, has a vehicle ownership of only 52 vehicles per 1 000 people,
reflecting policies that restrict the number of driving licences and promote
public transport. In 2005, the average vehicle ownership in coastal
provinces, at 35 vehicles per 1 000 people, was twice as high as in inland
provinces (see Chapter 13). Growth in the inland provinces lags
approximately eight years behind the trend of the coastal area.
Future vehicle growth will continue to be led by the 11 coastal provinces.
Together, they account for 70% of the vehicle-stock increase between now
and 2030, by which time ownership – at 260 vehicles per 1 000 people –
will be close to that of South Korea. Vehicle ownership in the inland
provinces steadily increases throughout the Outlook period, but they lag
behind the coastal provinces.
National fuel-efficiency standards for cars, SUVs and minibuses are being
introduced in two phases. In the first phase, the standards were applied on
1 July 2005 to new models and a year later to models already in production.
A second implementation phase, involving tougher standards, will take
effect in 2008 (Figure 9.7). The standards set maximum fuel consumption
levels for 16 weight classes, using the New European Driving Cycle. The
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Chapter 9 - Reference Scenario Demand Projections 301