Several more cities in China could implement new car registration restrictions

Gasgoo.com (Shanghai July 11) - Several more Chinese cities may begin implementing policies limiting new automobile registrations similar to those in effect in Shanghai, Beijing and Guangzhou, the Securities Daily reported today, citing recent statements made by the China Association of Automobile Manufacturers.

According to the CAAM, Tianjin, Shenzhen, Hangzhou, Chengdu, Shijiazhuang, Chongqing, Qingdao and Wuhan are all considering implementing such policies. If these cities do indeed apply these policies, total automobile sales would decrease approximately 25 percent, or 400,000 vehicles.

As a reference, following the introduction of the registration plate lottery system in Beijing, new car sales in the city fell by 520,000 units.

The CAAM does not advocate the introduction of policies targeting new automobile sales for various reasons. "Despite the fact that the GDP grew only seven percent over the first half of the year, production and sales volumes for the automotive industry both increased over ten percent, greatly aiding... the national economy," CAAM Executive Vice Chairman and Secretary General Dong Yang pointed out. Mr. Dong cautioned that if the above eight cities all implement policies limiting new purchases, China's total automobile sales will fall two percent, which would noticeably affect both industry output value and the economy as a whole.

Aside from the economic effects, the CAAM believes that automobile purchase restriction policies have not clearly demonstrated their effectiveness in tackling the issues of traffic congestion and air pollution. They also harm the sales performances of domestic own brand manufacturers which primarily focus on selling economy-level vehicles.

10.75 million automobiles were manufactured and 10.78 million sold in China over the first half of the year. The two figures respectively represent year-on-year growth of 12.83 percent and 12.34 percent.