The 28-year-old local youngster is busy preparing for a long journey in mid-June, when he will drive his favorite made-in-China jeep named "War Flag" in a four-vehicle motorcade to remote Tibet.

The expedition is regarded as a big event for the Shanghai 4x4 Club, an auto organization that was initiated by Ni earlier this year, gathering some 300 fervent local off-road vehicle fans.

"I'd take it (the journey) as a chance to shorten the distance between people, enhance mutual understanding and have fun together," said Ni.

Ni represents an increasing number of people in the city, who have seen cars begin to gradually change their lives by introducing a totally new experience of modern mobility and interpersonal communication.

Accompanying Shanghai's galloping development, the expanding local middle class seems to have felt the approaching steps of an automobile age, though the city is, as many say, still short of a mature auto consumption environment friendly for both car buyers and users.

Demand take-off

Sparked by the ongoing car-buying spree nationwide, the local market has also started to take off, which has enabled a growing number of people to forget about the days of roads crowded with bicycles and enjoy four-wheeled personal freedom.

Statistics from the Shanghai Vehicles Administration Bureau indicate that the number of new private cars in the city reached some 60,000 units last year, accounting for nearly 30 percent of the increase in the total number of local vehicles in 2002.

Authorities claim that one out of every three cars currently running on the city's streets is owned by local individuals, with Shanghai's private sedans climbing to over 142,000 units thanks to last year's spectacular surge. The city now has more than 1.4 million vehicles.

"The market has become far hotter than we could have expected," said Ni Bo, analyst with the Gallup Research Company.

Ni's company conducted a survey in December 2001 on the local private car market, finding the top hindrance for the market was the gap between incomes and hefty car prices.

"It seems more locals can now afford a car and they are much more willing to move forward with their purchase plans," Ni said.

Audrey Qian, a local company employee aged 34, is one of the city's growing number of new car buyers.

"The car for us means a big improvement in living quality," said Qian, referring to her family's Polo, manufactured by local automaker Shanghai Volkswagen. Qian and her husband paid about 170,000 yuan (US$20,560), including the licence plate cost, to get the car earlier this year.

She added that her family is planning to drive to Jiangsu Province to visit friends there during the Labour Day holiday. Such a plan would have been impossible, given the current situation with severe Acute Respiratory Syndrome (SARS), if they didn't have the vehicle.

Hurdles remain

Despite the seemingly brisk growth of the local private car market, some fundamental obstacles still exist, preventing the market from progressing at full speed, insiders said.

Local traffic authorities have maintained that the city is trying to loosen its policies regarding private car ownership. According to that guideline, for example, the number of licence plates for private sedans has increased to about 3,000 licence plates per month currently, compared with around 1,000 in 2001.

However, the private car sector isn't all that matters.

According to the Shanghai Urban Transportation White Paper, publicized by the city government last year, public transport will be a "long-term priority" with the city further controlling traffic volume in the downtown area to ease congestion.

Highlighted by arguably the mainland's most advanced urban rail transport and bus network, such public transportation facilities are expected to play a major role in meeting local residents' future daily traffic needs.

"It's quite difficult for Shanghai to expect its private car market to rev up significantly, if the city maintains its current policies in that area," said Angela Gu, senior associate of Automotive Resources Asia Ltd (ARA), an independent auto research company.

Given the growing market demand, the limited number of licence plates issued each month will inevitably drive up the cost for their acquisition, which will dampen the enthusiasm of many potential buyers in the long run.

On the other hand, a traditional consumption habit will still prevail, pushing many Shanghainese to list buying an apartment, instead of a private car, as the top item on their purchase plan, according to Gu.

Her view was echoed by Yin Qizhen, senior executive in charge of individual financial services at the Bank of Shanghai.

"Despite its gradual growth, local private car consumption is by no means as far-reaching as buying apartments or mobile phones among locals," he said.

Yin's company granted a total of 400 million yuan (US$48 million) worth of car loans for local individuals in 2002, compared with nearly 11 billion yuan (US$1.33 billion) worth of loans for city residents to buy apartments the same year.

"We are often puzzled about the car loan market - though its growth momentum is there - because we can't clearly see the future orientation of Shanghai's private car sector," said Yin.

To make things worse, even if some locals have bought a private sedan, the car-use environment is hardly satisfactory because of quite a lot of complex and sometimes unreasonable fees involved with maintenance and usage, including the notoriously high parking charges in Shanghai.

And the existing frequent traffic congestion on the roads may make some people put off their car-buying plans, analysts said.

Given such barriers, Gu of ARA predicts that the future of Shanghai, as a densely-populated metropolis, will be like many European countries, where cars aren't a necessary transport tool for many people as they prefer to choose public transportation facilities.

(China Today April 26, 2003)