It's true. The latest figures from the U.S. Department of Transportation show that China surpassed the U.S. last year in the total number of cars produced. This is a radical shift from 1980, when the U.S. manufactured 56 times more vehicles than China. In 2008, China produced 9.5 million vehicles, while the U.S. produced 8.7 million vehicles.
What has caused this change? As we know, China's growing middle class has accelerated demand for convenient, personal mobility. We also know vehicle production in the U.S. has stagnated due to the economic downturn. Given current trends, it is reasonable to assume that China will continue to surpass U.S. vehicle production in the near future.
While it may be easy to interpret this news as an eco-apocalypse just waiting to happen, consider this. China has one of the most progressive fuel economy standards in the world. The average new car in China gets 35.5 mpg and is slated to rise to 42.2 mpg by 2015. Even Obama's fuel economy policy, heralded as monumental, falls far behind China's.
In addition, China has tax policies in place intended to stimulate demand for more efficient vehicles. Those with the highest fuel economy are subject to a 1 percent sales tax. Sports cars and SUVs are subject to a 40 percent sales tax.
Savvy vehicle manufacturers are maneuvering to get a foot in this expansive market. This is true not only for conventional internal combustion vehicles, but for plug-in vehicles as well. A123, one of America's most cutting-edge electric vehicle battery companies, has just partnered with Shanghai Automotive to develop an electric car market.
With trends like these, China could possibly soon be considered a leader in the global green car market as well. Time will tell, but I am glad to see the Chinese move forward in this direction.