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The taxi market in Beijing is a prize worth lusting after because about 8 per
cent of the country's 780,000 cabs cruise the capital's traffic-choked roads.
As part of its effort to impress visitors coming to Beijing for the 2008 Summer
Olympic Games, the municipal government has decreed that all 70,000-plus taxis
now plying the streets be replaced by 2007.
The plan has set pulses racing at mainland carmakers desperate for a bit of good
news after months of falling sales.
The bigger outfits are already competing hard in hopes of winning a big share of
the new business.
Most are pinning their hopes on the expectation that the Beijing government will
eschew the usual local favouritism that prevails in China and open the market
to all comers.
Internal protectionism is rife in the country, with regional governments often
offering incentives for the purchase of locally made goods.
The taxi market in Beijing - China's largest - is a prize worth lusting after.
About 8 per cent of the country's 780,000 taxis cruise the capital's
traffic-choked roads.
The number of drivers, estimated at 130,000, would populate a small city.
Last year, the fleet hauled 540 million passengers, and sported operating income
of 8.17 billion yuan (HK$7.70 billion), equal to a fifth of the city
government's operating budget, according to China News Weekly, a
publication of the state-run China News Service.
Not all those rides were very comfortable, since not a single new taxi has
joined the fleet since mid-2002 and most of the cabs now rolling began service
in 1998. In taxi terms, they have reached the end of their six-year life span.
Since late last year, the municipal transportation commission has been drafting
new fleet standards, though what interested car companies the most was a
promise that the city's 1,500 taxi operators would be free to choose whatever
car makes and models they wished.
That energised China's automakers.
Shanghai Volkswagen held a fair in Beijing a few weeks back promoting its
Santana 3000 model, and arranged trips for Beijing taxi companies to visit
Shanghai and other cities where Santana 3000s are widely used as taxis.
Chery Automobile, based in Wuhu, Anhui province, arranged holiday tours taking
Beijing drivers to Wuhu in mid-September to show off its Son of the East model.
"Some carmakers even paid for leaders of Beijing taxi companies to travel to
Athens to watch this year's Olympic Games,'' Li Hongbao, an official with
Shanghai VW's north China sales and service centre, told China News Weekly.
A survey found that 75 per cent of Beijing residents would rather see fleet
operators buy the Sonata model made by Beijing Hyundai, a 50-50 joint venture
between Beijing Automotive Industry Holdings and South Korea's Hyundai Motor
Group.
The city's taxi drivers, however, did not share the sentiment, with 76 per cent
of them opting for Shanghai VW's Santana 3000.
Taxi owners were more interested in the bottom line. Two big operators - Beiqi
KMB, a joint venture between Beijing's Beiqi Group and Hong Kong's Kowloon
Motor Bus, and Beijing New Moon United - said they will choose models based on
operational efficiency.
Many taxi firms still doubt the government will really leave the choice up to
them. "We will buy whatever models the government tells us to buy,'' one
manager said.
zhong.wu@globalchina.com
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