Small cars have been making great strides in China recently.  Records indicate that for the first half of the year, cars with displacement below 1.0L took 1/3 of the market.  Chery’s cars are attractive and can be seen more and more on the street.  The majority of another domestic car manufacturer, Geely’s, products have small engines and have also been selling quite well. These two companies have been expanding quickly and have surpassed some bigger car companies how can’t keep up.

There are two reasons behind this change.  The first is the price of gasoline.  Prices are the highest in history and are making news worldwide.  Domestic prices have gone up several times, but are still lower than prices internationally and in neighboring countries.  In the south, some places have had their mini "oil crises" with stations limiting their supply resulting in long lines of cars waiting to fill up.  But this is an old story: prices go up, lines form at the pumps and small cars find a market.  The same result can be seen with the rise of Japanese fuel-efficient cars in America during the gas crisis in the 1970’ s.