Cars and Drivers

Will Air Pollution Slow China's Red-Hot Car Market?

Douglas A. McIntyre

Published: January 12, 2017 12:05 pm

Last Updated: January 12, 2020 3:55 pm

The China Association of Automobile Manufacturers announced car and light vehicle sales rose 15% to 24.4 million. Some of the growth likely was due to favorable sales tax provisions from the central government. Since the country has over 1.39 billion residents, the purchase numbers should drive higher for years.

However, air pollution problems in large cities are so severe that the use of vehicles may have to be curtailed, which almost certainly will cut into new car sales.

Air quality alerts are frequent in China’s largest cities. Car and truck exhaust, factories and burning of coal at homes and businesses drive pollution to levels that already have had tremendous health consequences. One of the short-term solutions to this has been a cut too car traffic by as much as 50% per day.

The AP reported last month on the results of a “red alert,” the government’s designation for high air pollution:

Since the red alert went into effect, more than 700 companies stopped production in Beijing and traffic police were restricting drivers by monitoring their license plate numbers. Dozens of cities closed schools and took other emergency measures.

If the “restricted” driving continues, the net effect will damage almost all global car manufacturers, which have invested hundreds of millions of dollars in plants, equipment and marketing.