Surprise! Someone's Buying Cars

The Find: A rare bright speck in the automobile industry this week, as reports from China indicate that in March Mercedes-Benz had its best ever month in the country, and GM sold 23 percent more vehicles than the previous year.
The Source: An interview with University of Pennsylvania political science professor Jacques DeLisle in Knowledge@Wharton.

The Takeaway: Good news in the car business may be as rare as hen's teeth these days, but apparently Chinese consumers missed the memo about the global slowdown, offering a small ray of sunshine in the midst of the general gloom and doom hanging over the industry; Mercedes recorded sales and GM saw a 23 percent improvement on last year. In response to the news, Wharton has pulled together expert opinion on both what has held back car sales in China in the past and what's spurring them on now. DeLisle explains the historically slow sales numbers in the market:

The real barrier to raising domestic demand in China is over-saving by Chinese workers, who sock away about 40 percent of their income because of the absence of a reliable safety net for social security or health care. Until the government can get people to start spending income, there will be limits to increasing domestic demand.

So what's changed? According to Mercedes-Benz (China) chief executive Klaus Maier, "entrepreneurs in China are positive and are in a good mood." The question remains though, how can we get a bit of that optimism back on our own side of the world?

(Image of no car sales sign by pochacco20, CC 2.0)

Jessica Stillman

Jessica lives in London where she works as a freelance writer with interests in green business and tech, management, and marketing.

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