In 2018 that the number of cars on China’s roads exceeds 385 million, revealed a study published by Tsinghua University. With only an estimated 800,000 parking lots and 30 million of-street parking spaces, China is facing a parking crisis. There is also a strong uneven distribution of those parking spaces. On average first and second tier cities have 0.8 parking spaces available per car, with the availability in small and medium-sized city dropping as low as 0.5 parking spaces per car.
Furthermore, simply finding a parking space where it is needed is nearly impossible. Parking in those spaces can also be difficult for novice drivers, with many being extremely small. Once a parking space is found, drivers are faced with fees that are not transparent and very high.
Inefficient parking also significantly impacts traffic flow. Statistics show that 30% of traffic congestion problems are caused by parking difficulties, and 48% of vehicles need to wait in line when entering and leaving the parking lot.
With the number of cars on China’s roads steadily increasing, parking is becoming a top priority.
Smart parking is becoming the “new favourite” industry
The commercial value of the parking industry is enormous. China has an estimated parking gap of 60 million. The China Industrial Research Institute predicts that the smart parking industry will reach a market size of RMB 10 trillion in the future. In addition, there are data showing that the market size of smart parking in the first half of 2018 has exceeded 10 billion globally. Currently the smart parking industry has a scale of USD 26 billion, growing at a rate of 18%.
Smart parking can use parking data in various regions, and allocate parking spaces based on availability, thus improving parking space utilisation. The system allows users to reserve and find parking spaces with the ease of their mobile phones. Furthermore smart parking creates a more transparent and fair pricing system. Payments can be made online based on a clear pricing structure. The system is self-managing, therefore further reducing parking costs.
Smart parking – still not that smart
Work on smart parking systems started in early 2014. Although the market reached a global scale of 10 billion, the system has not been applied on a large scale. In China coverage currently reaches only around 7%.
The reason that smart parking is not developing as fast as initially hoped for is because smart parking is not yet smart enough. The industry is currently highly fragmented with 38 different enterprises developing systems independent from each other. Currently no public data sharing platform exists. Furthermore, developing the necessary infrastructure is incurring high costs. Smart parking requires the use of wireless communication technology, mobile technology, GPS positioning technology, etc. In addition, engineering integration costs are high.
China Report Network data shows that 800,000 parking lots nationwide can be considered for smart parking in the next 5 years. The cost of converting a single parking lot is about RMB 100,000, making the overall expected costs at RMB 160 billion.
According to data released by Zhiyan Consulting Network, the number of car ownership in China is expected to reach 280 million by 2020 and 360 million by 2025. In 2017, the demand for parking spaces reached 270 million. In 2018, the demand for parking spaces will be nearly 300 million, with an annual growth rate of 11%. By 2025, parking demand will reach 600 million. Currently only 250 million parking spaces exist. Although smart parking can significantly increase utilisation rate of existing parking spaces, it will not be able to resolve the fundamental issue – insufficient parking spaces for increasing numbers of cars.