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By Kenneth B. Medlock III, Ronald Soligo and James D. Coan

I. Introduction

In recent years there have been a number of studies aimed at estimating future motor vehicle stocks and motor fuel demand. Many of these studies have been motivated by a desire to estimate motor vehicle stocks and associated fuel use, particularly in China. China stands out due to its massive population and its persistently high growth rates over the last 30 years. A consequence of this growth has been, particularly in the last decade, very rapid growth in the ownership of automobiles and concomitant growth in the demand for oil—the latter of which has resulted in widespread concern about the future balance of global oil markets. Moreover, the geopolitical implications are far-reaching, as nations must deal with the implications of China’s large and growing demand for oil. Within China, the growing stock of vehicles and associated vehicle use are presenting challenges related to road infrastructure, urban congestion, and the demand for oil, which increasingly must be imported. This, in turn, means that China must also grapple with its own concerns about energy security.

The growth of automobile stocks in China has been extremely rapid in recent years. The total vehicle stock in China, which includes cars, vans, buses, and trucks, has more than quadrupled in a decade, increasing from 14.5 million in 1999 to 62.9 million in 2009. Growth in the stocks of personal cars has been even faster, rising to a total of 45.9 million by 2009, with Chinese vehicle sales exceeding sales in the United States in both 2009 and 2010.

The effect of this rapid growth has already shown up in China’s energy demand, with oil consumption rising from 5.6 million barrels per day (b/d) in 2003 to 9.2 million b/d in 2010. The growth in demand has outstripped increases in domestic production and resulted in rapidly rising net imports, which are up from 2.0 million b/d in 2003 to 4.9 million b/d in 2010. The composition of oil use has also changed, with the transport share of the total rising from 29 percent in 2003 to 36 percent in 2008.5 In its World Energy Outlook 2010 New Policies Scenario, the International Energy Agency (IEA) forecasts that China will consume 14.3 million b/d in 2030, with the transport share of total oil demand rising to 61 percent, meaning oil use in transportation could rise to over 8.7 million b/d. Accordingly, imports are forecast to rise to 11.2 million b/d.

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