Beijing's Plan To Limit Traffic Antagonizes Auto Dealers

To reduce congestion, Beijing will follow in Shanghai's footsteps set 10 years ago by limiting new car registrations; only Beijing residents will be able to obtain one,and only vehicles with such plates will be allowed entrance to city center in 2011

Providing an excellent example of a congestion measure that is not market-based, indeed - some might say 'draconian', the Chinese capital's measure could catch on in other cities in the world's #1 auto market and cramp auto sales for the world's major auto manufacturers.

"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."

"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", said an independent auto analyst.

"This is a negative example and other cities will follow it for sure," said Xiong Chuanlin of the China Association of Auto Manufacturers. "The auto market is a pillar industry."

[Note to reader: The complete article may be available to non-WSJ subscribers for only 7 days from date of publication]

From NYT: Multiplying Drivers Run Over Beijing Traffic Plan: The problem: Beijing has a huge middle class population - and almost every one of them wants a car. Car sales won't slow down.

"As of December, Beijing counted 4.7 million registered vehicles, with 2,000 new ones joining the clog each day. When the number reaches 6.5 million, traffic researchers calculate, the Beijing streets will be fully saturated."

Thanks to Mark Boshnack

Full Story: Beijing Cracks Down on Car Buyers

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