China is a Gas for McDonald's

McDonald's Corp. (Oak Brook, Ill.) opened its first drive-through food and gas location in Beijing last week.

The restaurant is the first of an anticipated 25 – 30 in the next 12 – 18 months as part of a McDonald's joint venture with China Petroleum & Chemical Corp. (Beijing). Both gas stations and drive-throughs are booming as car purchases by newly affluent drivers speed China's change from a bicycle culture to a car culture.

China's double-digit economic growth has created a burgeoning market for cars, fast food and other consumer goods. The country overtook Japan last year to become the world's second-biggest vehicle market after the U.S., with 7.2 million cars sold, a 37 percent growth. McDonald's opened its first restaurant in China in 1990 and has grown to 780 outlets in 120 cities. It faces strong competition from Yum Brands Inc. (Louisville, Ky.), the industry leader in China with more than 2000 KFC restaurants and 300 Pizza Huts.

McDonald's plans to open about 100 new restaurants in China over the coming year, with more than half equipped with drive-through windows. McDonald's already has 15 other drive-throughs in China, in Shanghai and the southern cities of Guangdong and Shenzhen. The 20-year deal with China Petroleum (also known as Sinopec) gives it the pick of any sites where the Chinese partner decides to open a restaurant beside one of its filling stations. Sinopec, the country's No. 2 oil company, has more than 30,000 outlets throughout China and is adding 500 to 600 a year.