Chinese Snatch Up Status Symbol Cars

Featured - Main Slider, On The Street — By Ryland Barton on June 11, 2011 1:11 am

By Ryland Barton
For ChinaInFocus

In a glitzy Audi showroom in Oriental Plaza on Wangfujing Street—Beijing’s answer to New York’s Fifth Avenue — a Chinese toddler points at a brand new candy apple red R8 Audi Quattro at the front of the store and proclaims, “All the cars here are not as good as my grandfather’s.”

Welcome to 21st century China where what you drive increasingly determines your social status. The BMW 5 Series is strictly for middle management while the 7 Series model signals corporate executive. The Audi A6 is reserved for government officials and businessmen while old money sticks to the Mercedes Benz E Class.

When discussing “nice cars,” an Audi salesman laughed, saying, “You had better go down the street to Porsche—we just sell Audis here.”

In the midst of China’s impressive economic takeoff, consumers have developed conspicuously refined tastes in luxury goods, especially cars. In the wake of the country’s 1979 open-door policy, newly moneyed Chinese citizens may have been satisfied with buying their own bicycle. But with more money in their pockets today, Chinese people have been turning to cars show off their increasing affluence.

“The first thing people do when they get money is buy a car—not a functional car—but because of the image, they buy a nice car,” says William Yao, a salesman at a BMW dealership in central Beijing.

China overtook the United States to become the world’s largest car market in 2009 after it employed tax incentives to promote vehicle purchases. That year, China sold nearly 13.6 million vehicles, surpassing the U.S.’s 10.4 million.

“We know the U.S. has a very long history of car culture, but in China we have stepped from this time of knowing nothing about cars to trying to learn everything,” Yao says. “Now people are trying to consider everything… affordability, reliability, and performance.”

In China’s big cities today you’ll no longer see the streets packed with a river of bicycles. Cyclists and motorbikes are now relegated to ancillary bike lanes, separated by barricades on the sides of the main streets. And they need them. Chinese drivers tend to veer toward the aggressive, and when they aren’t stymied by the ubiquitous traffic, they drive fast.

“There’s one guy who drives around the 2nd Ring road in 13 minutes every Friday night,” says Yao. The 2nd Ring is a highway that encompasses central Beijing. To drive the 2nd Ring’s 20-mile circumference in 13 minutes, the driver would be averaging 93 mph through traffic and stoplights. “He’s bought two BMWs from us,” adds Yao.

Reckless drivers have come under fire over the past year in China after young speedsters injured or even killed pedestrians in high-profile incidents. The most famous of these stories involved a 23-year-old student in Hebei Province named Li Qiming who ran over and killed a pedestrian. When confronted by police Li reportedly said, “Sue me if you dare, my father is Li Gang!” – the elder Li being the deputy police chief of Baoding city in Hebei Province. The younger Li evidently invoked his name to get off the hook.

Instead, the incident has become a national punctuation point that’s helped amplify public criticism of young, reckless, and often wealthy drivers.

“Young people usually aren’t able to afford these cars, only ones with rich fathers,” says Fan Qunwen, a student milling around the BMW auto lot. “These people buy cars not through their own ability, and they never have to make any decisions for themselves. Even ethical decisions.”

Beijing streets are packed with cars, but obtaining a car is difficult. Fan makes about 2,000 RMB ($308) a month editing part-time for Xinhua News and doesn’t have the cash to buy a car. He doesn’t consider taking out a loan to be an option.

Traditionally aversive to debt, only about 30 percent of Chinese car buyers take out a loan when purchasing a car. Comparatively, auto loans account for 60 to 80 percent of vehicle sales in the U.S.

But the pressures to buy a car are still great. As status symbols, cars signify stability, maturity but—maybe most importantly in China’s male-majority population—cars signify marriageability.

Standing with his girlfriend, Fan says he longs to own his own car one day. “Traffic is a serious problem, but it’s easier to have a girlfriend if you have a car,” Fan says. “Your parents know you’ll be able to get a girl and get married, find a good job and a house one day.”

Tags: Audi, autos, BMW, cars, driving, Porsche