Auto Boom: Cars Flood China's Jam-Packed City Streets

HANGZHOU, China – Once a country of bicycles, China is fast becoming a nation of cars.

Every day some 1,500 newly registered vehicles hit Beijing's already congested streets — more than 500,000 a year in that city alone. The result is a gridlock that makes getting anywhere an undertaking, and traveling during rush hour a mission impossible.

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The rapid rise of China's auto industry is perhaps best exemplified by the country's second-largest car maker, Geely. Few Americans had heard of the company until a report surfaced a few weeks ago that it was in talks with Ford to acquire Volvo.

Just 20 years ago the Hangzhou-based company was making motorcycles, but last year more a quarter-million vehicles rolled off its assembly line. Geely vice president Wang Ziliang says the company's philosophy is quite simple: "We decide what cars to build based on market research. People want good gas mileage and fair value. That's why we started building the Panda."

The Panda is Geely's latest sub-compact offering, and with its large round headlights it bears a striking resemblance to its namesake. A dealership in Zhejiang Province was filled with potential customers slamming doors and pushing buttons. One customer said she was drawn to the little car because "it's cute and economical for the good gas mileage." That kind of reaction is music to the ears of company executives, who say Geely is selling 1,000 Pandas a day.

In January, for the first time, China's automakers sold more cars than their U.S. counterparts. But that's actually a rare piece of good news for Detroit. General Motors has a more than decade-long partnership with Shanghai Automotive, building Buicks destined for the Chinese market.

"If you look at GM and Ford, both of them are doing well in China and growing," said auto analyst Yale Zhang, director of China Vehicle Forecasts for industry watcher CSM Worldwide.

Inside the company's state-of the-art factory there are few workers and plenty of robotics, welding parts along the assembly line in a shower of sparks.

Costs are much lower, and most assembly line workers make $3,500 a year — a good wage in China but just 7 percent of what the same job costs GM in the U.S.

Within the next five years analysts predict China will become the largest auto market in the world, but don't expect to see Pandas at a dealership near you anytime soon. Priced at less than $10,000, Geely is holding off on plans to export to America until the economic future of Detroit's Big Three is determined.

That's not to say the company doesn't have plans to conquer the U.S. market, but first it wants to ensure quality control, knowing a less than perfect product will tarnish a carefully built image.

FOX News producer Andrew Fone just returned from two weeks in China where he traveled the country to get a sense of how the Chinese economy is doing during the financial crisis.