Beijing's municipal government Thursday unveiled sweeping measures to curtail the number of cars sold in the city next year, in a bid to ease traffic chaos that could prompt similar moves in other Chinese cities and deepen an expected slowdown for the auto industry.
Beijing will limit the issuance of new car and microvan license plates in the city to 240,000 in 2011, about one-third of this year's figure, and only registered Beijing residents will be able to obtain one. Cars that don't have Beijing license plates will be barred from entering the main city area during rush hour.
Yale Zhang, an independent auto analyst, said the measures were more stringent than the market had expected. "Auto makers may have to adjust their production and sales plans next year," he said.
Shanghai has had similar restrictions on car sales for almost 10 years, but during that time, Beijing has "insisted it would not do so," Mr. Zhang said.
"The move by Beijing will basically cost auto makers half a million new car sales next year. But Beijing as the capital city can become an example for other cities in the future," he said.
The China Association of Auto Manufacturers reacted angrily, with the association's vice secretary, Xiong Chuanlin, making an unusually strong statement in opposition to the move. Mr, Xiong said the association opposes any regulations to restrict vehicle consumption in China.
"This is a negative example and other cities will follow it for sure," he said. "The auto market is a pillar industry."
Jin Yibo, spokesman of Chery Automobile Co., said: "Definitely this will impact our sales in Beijing next year, But it's hard to say what percentage will be affected specifically."
"In fact, what worries me more is that other cities will follow Beijing's lead to issue such regulations, and that will have a bigger impact," he added.
State media have reported that the eastern provinces of Jiangsu and Zhejiang are considering measures such as requiring residents to secure a parking space before being allowed to buy a car.
Beijing residents had been expecting new traffic restrictions, especially since a Beijing municipal committee this month recommended some vehicles be barred from entering certain roads during peak traffic times, as was announced Thursday. The committee's proposals didn't include a quota for license plates, however.
China's total auto sales rose 26.9% in November from the same month last year to 1.7 million units, the auto makers association said earlier. The strong growth rate was partly due to expectations of new traffic restrictions, but also because of the imminent expiration of some incentives for vehicle purchases. Total auto sales in the January-November period rose 34.1% from a year earlier to 16.4 million units.
China last year overtook the U.S. as the world's largest auto market, as the nation's rising middle class shuns bicycles and public transport and embraces cars instead. But Chinese cities have been unable to adapt quickly enough to the rapid rise in car usage, and increasingly face paralyzing traffic conditions.
In a sign of the sensitivity of a policy that could prevent Chinese families from attaining a cherished middle-class benchmark, at least some Chinese media were ordered by censors on Thursday to limit their reporting on the issue and to refrain from emphasizing any controversy, according to people with knowledge of the matter.
In Beijing, car ownership surged to 4.7 million vehicles this year from 2.6 million in 2005. Despite major investment in new subway lines, the city's roads have become gridlocked. A pre-holiday weekend in September was officially deemed to have the worst traffic conditions ever by the Beijing Traffic Management Bureau, with 140 traffic jams that extended the city's rush hour by an hour. In August, a traffic jam that clogged a highway north of Beijing for 10 days and stretched for as long as 100 kilometers made headlines around the world.
Under the plan announced Thursday, Beijing will increase parking fees in the city and reduce them in rural areas, discouraging drivers from parking within the city. Individual car users will account for 88% of the 2011 license plate quota.
Beijing's move will add to worries that China's red-hot auto market is set to slow significantly next year. Executives from top car manufacturers have said in recent weeks they expect China's national auto sales growth to slow to around 10% in 2011, from over 30% this year and nearly 50% in 2009. The expected slowdown is due in part to new traffic restrictions but also to an anticipated increase in the vehicle ownership tax and the expiration of subsidies for purchases of small, fuel-efficient cars.