The Beijing Municipal Government has issued several new measures aimed at tackling traffic congestion in the city.
Effective immediately, buyers of automobiles that are replacing old vehicles may continue to use the previous license plates and won’t be subject to its first quota system for new plates. Under its regulations, the issue of new license plates will be otherwise subject to a quota published annually by the municipal government with 88 per cent allocated to first-time individual buyers and 12 per cent to business buyers on a monthly basis via a lottery system. The quota for the coming year will be 240,000 – 20,000 per month.
In addition, there will be increased parking fees in certain areas and a cap on the number of automobiles that can be purchased by government agencies.
It has also been indicated that further measures may follow to restrict the use of motor vehicles in main congested areas within the city during peak traffic periods.
According to Hetong Guo, the chairman of Lentuo, the largest non-state owned automobile retailer in the city, the measures may adversely affect the growth of the automobile retail market but there is still optimism about market potential. He estimates that new car sales in 2011 will be significantly below the record number of approximately 800,000 in 2010 but believes a substantial amount of sales will be made to non-first-time buyers who buy new cars to replace their older vehicles.
He believes this development has been factored in by buyers who have stepped up purchase activities in the days prior to the publication of new measures with dealerships receiving a significantly higher number of orders in December, 2010 – far exceeding the normal rate in previous periods.








