In 2010, China is GM's Number One Buyer Worldwide: Why Does It Matter?

Where are the most Buicks in the world sold? Not in the US but China. This year, sales of American-based General Motors (GM) cars in China outpaced that same consumption in the US. This development has ramifications for the auto industry and international climate policy.

USA Today reports that in 2010, Chinese consumers bought 2.35 million cars from GM. Demand in the US was about 136,000 less over that same time period. The total cars sold for 2010 represent a 29% increase over the year before. In comparison, US sales rose just 6%. One of the most popular car brands in China is Buick, which had anemic sales in the US.

Other carmakers also saw gains in the Chinese market. For example, Porsche saw an increase in sales of 63% in 2010. However, their totals are far lower than GM, with about 15,000 units sold.

One major automaker didn’t experience similar success in China, though. Toyota, the largest auto manufacturer in the world only sold about a third of GM’s total in China despite being the most popular car brand in the world.

The fact that GM outpaced Toyota by three-to-one is indicative of the allure an American lifestyle in an increasingly affluent China. Banking on this allure, GM plans to export US$900 million worth of cars and parts to China over the next two years.

GM also made big gains in other large developing markets. In Russia, sales increased 12.4% while in Brazil they jumped 10.4% in 2010. Overall, though, China remains the largest market for cars in the world.

This status brings up some issues about global trade, climate change, and local air quality, though. In the US, improved tailpipe emissions standards will help reduce carbon dioxide emissions, a main factor in causing climate change. Regulations are much more lax in China, however, as well as other foreign markets.

In addition, new cars on the road generally replace motorcycles and scooters, which get much higher mileage per gallon. The carbon intensity of driving a car is anywhere from two to seven times greater per mile than these other vehicles.

Locally, an increase in the number of cars on the road also negatively affects air quality. In the run up to the Beijing Olympics, there were worries about air quality possibly putting a damper on the event. Since then, Beijing has taken to auctioning off a set number of new license plates each year to reduce both congestion and local air quality problems.

It’s clear more needs to be done on the international level to reduce automobile emissions. There are a number of approaches from switching to more hybrid and alternative technologies to better urban planning to prevent sprawl to improving public transit. While China is ramping up it’s renewable energy production, it should also consider automobile efficiency if it really wants to lay claim to the world’s clean energy leader.

Photo credit: Eyeline Imagery