New Car Sales, and Pollution, on the Rise in China

A third assembly plant for French vehicle maker PSA Peugeot Citroen opened in China this week, creating jobs in China at a time when jobs are being cut in France. At the opening ceremony for the factory based in Wuhan, CEO of PSA Peugeot Citroen, Philippe Varin, noted that the new manufacturing facility would help the company to capture up to 5% of China’s car market by the year 2015. In collaboration with Dongfeng Motor Corporation, four models will be produced at the factory, including the immensely popular Peugeot 301 sedan, with the goal of increasing the annual capacity of the company to 750,000 units by the end of 2015.

In an interview with the global head researcher of the automotive industry for international research company Ipsos at the branch based in Shanghai, Klaus Paur, he revealed that China is most likely the only option PSA Peugeot Citroen has to lift it out of its financial difficulties in Europe, noting that the company’s reliance on the European market has made its problems worse. Having suffered a massive loss last year, the vehicle manufacturer has reportedly started a restructuring plan to eliminate 11,200 jobs in France, and will be closing a factory located on the outskirts of Paris.

In contrast, sales of Dongfeng Peugeot Citroen vehicles climbed 33 percent, with 276,896 units being sold in the first six months of the year. The general manager of the company, Qiu Xiandong revealed that there are plans to introduce eleven models of vehicles by the end of 2015. China’s passenger-vehicle market has risen by 15 percent in the first five months of this year, and vehicle manufacturers, including Dongfeng Peugeot Citroen, are gearing up to meet the increasing demand.

While personal wealth continues to grow in China, along with all the items money can buy (such as new vehicles), air pollution is a matter of concern in many of the country’s major cities, including in Beijing, Guangzhou, Xi’an, and Shanghai. This has led to an increasing demand for air conditions in businesses and private homes. Statistics compiled by the World Bank note that pollution with cost China as much as 5.8 percent of its GDP, primarily due to the demand for health care. Citizens taking responsibility for their health are trying to ensure that they keep their environments as pollution-free as possible, and while some may see suppliers of air purification systems as cashing in on people’s fears, they are filling a real need and offering citizens some peace of mind. It has been noted, however, that not all air purification systems are created equal and consumers need to do their homework before buying one.