If cars were smaller, traffic would move

ACCORDING to the China Association of Automobile Manufacturers, vehicle sales this year is expected to grow by 15 percent to hit 10 million units.

In the first five months, over 4.3 million vehicles were sold. At this pace, my calculation indicates that China is on track to become the world's largest automobile market within four years, surpassing the 17 million annual sales units in the United States last year.

Although automobile prices have been on a relentless downward trend for several years amid intense competition, auto business in China by and large is a fairly profitable growth industry.

However, for China's domestic auto manufacturers, the picture is not all that sanguine.

Auto manufacturers in China can be classified into two camps.

The joint venture (JV) brands are those mature and popular car models introduced to the China market by global giants but manufactured locally by their JV partners using a combination of local and imported parts and components.

These major players in China include GM and Ford in the US, VW and PSA in Europe, and Toyota, Honda, Nissan, and Suzuki in Japan.

Domestic companies including Chery, Geely, BYD and Huachen sell car models using domestically developed technologies owning their own intellectual property rights.

Currently the JV brands hold the lion's share of the market, leaving domestic companies with less than 10 percent of market share.

Domestic companies are mostly active in the low-end, less profitable A00 and A0 market segments (passenger cars can be classified into A00, A0, A, B segments based on the wheelbase size).

As the JVs start to introduce low-end A0 models as well, such as Toyota's Yaris and Honda's Fit and City, domestic companies are increasingly under competitive pressure.

An often touted strategy for domestic companies is the concept of a national car inspired by the success of VW Beatle and Ford's Model T.

A national car must of course be built by a national company. However, like beauty, the exact meaning of "national'' seems to be blurred, lying in the eye of the beholder.

For example, Chery Automobile does not display a pure national pedigree any more these days, viewed from both the design and engineering perspectives.

The upcoming A3 model from Chery, which is expected to be wildly popular, holding the promise to be a strong national car contender, actually uses a powertrain package called ACTECO that is developed by AVL LIST GMBH in Austria.

The car itself is the work of the famous Italian auto design outlet Pininfarina.

On the other hand, some JV models are already using close to 100 percent domestically manufactured parts and components.

Let us set aside the sacred debate on the exact definition of "national'' or "domestic.'' Instead, let us explore some of the characteristics that might make a car a great national success story.

Here is my little definition of a national car:

1. Length/width/height: 4,100x1,700x1500;

2. Wheelbase: 2,500 mm to 2600 mm, in either the large A0 or small A class;

3. Two compartment hatchback or coup;

4. Weight: About 1,200 kg;

5. Fuel economy: less than 7 liters/100 km for combined highway and city driving, preferably using new energy technologies;

6. Price: 70,000 yuan or less;

7. Sales volume: over 250,000 units a year.

The size and the weight requirements are to ensure efficient use of space. Roads in China are crowded and parking space is scarce.

Outside of the window of my office in the CBD area in Beijing is probably the world's busiest intersection, with cars crawling at a snail's pace almost every minute of the day.

My naive calculation is that if every car is shorter and narrower by 10 percent, the traffic will probably move faster by 10 percent.

Chery's A3 has the potential to be a big hit. But the car is just too heavy for its size.