23 January 2019
Fancy cars can wait, as would-be buyers build up their cash pile in the stock market. Photo:
Fancy cars can wait, as would-be buyers build up their cash pile in the stock market. Photo:

Affluent Chinese chasing stocks, not cars

The stockbroker is beating the car salesman in the battle for Chinese wallets, Bloomberg reported.

With China’s benchmark stock index more than doubling in the past year, consumers like Tom Zhang are deferring big-ticket purchases to chase the rally.

The Beijing resident was deciding between a Buick and a Volkswagen Passat before concluding his 300,000 yuan (US$48,000) would be better off in equities.

He was right, as his holdings soared to 800,000 yuan in value in little more than a year.

“I feel like I am good at this, that I can make more,” Zhang, 26, said as he left a branch of Qilu Securities Co. in Beijing.

“Why would I kill the hen when there are more eggs on the way? I can always buy my car later.”

Investors have opened almost as many stock accounts this year up to May 22 as in the previous four years combined.

The stampede into equities is the latest factor slowing car demand in the world’s largest market, where sales last month rose at the slowest pace in more than two years.

“The stock market is like a pump that sucked up all the money,” Cui Dongshu, secretary general of China’s Passenger Car Association, said in a phone interview.

“People are not buying cars, no matter how big the incentives. People want their money in the stock market.”


For the industry, things aren’t likely to recover until the stock market is “back to its senses”, Cui said.

When that happens, Zhang, the stock investor who deferred the Buick purchase, figures he would have made enough to buy a more luxurious car to drive his girlfriend around in.

“I’m thinking maybe an Audi A4 or BMW X3,” he said. “Maybe something even better.”

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