Shenzhen imposes limits on purchases of new cars

By Li Qiaoyi and Liang Fei Source:Global Times Published: 2014-12-29 23:33:01

Decision sparks controversy, buying rush

A scene of traffic congestion in Shenzhen on September 5, one day before the Mid-Autumn Festival Photo: CFP

Shenzhen in South China's Guangdong Province has decided to impose limits on car purchases, the local government announced on Monday, as the nation pushes for a greener economy.

The city has become the latest city in China to introduce such limits.

Starting from 6 pm on Monday, the city began curbing auto purchases for an initial period of five years, during which there will be an annual vehicle ownership quota of 100,000, according to the announcement on the official Weibo account of the traffic police department of Shenzhen Public Security Bureau.

Of the total quota, 20,000 will be allocated to purchases of electric cars via a lottery process. And the rest of the quota will be for traditional cars and divided between a lottery process and a bidding process.

In addition to car purchase limits, the city on Monday banned passenger vehicles with license plates issued in other places from four of Shenzhen's main districts during peak times on working days.

Shenzhen currently has over 3.14 million cars, media reports said Monday. A Shenzhen resident told the Global Times Monday that the city usually sees large traffic jams before holidays.

The announcement widens the number of cities with limits on purchases of new vehicles to eight from the existing seven, which are the Beijing, Shanghai and Tianjin municipalities; Guiyang, capital of Southwest China's Guizhou Province; Hangzhou, capital of East China's Zhejiang Province; Shijiazhuang, capital of North China's Hebei Province; and Guangzhou, capital of Guangdong Province.

Industry analysts downplayed fears about the impact from the new restrictions on the country's auto market, which is already cooling.

In the first 11 months of the year, auto sales totaled 21.1 million units, a rise of 6.1 percent year-on-year, but well below the 15.5 percent rise in the same period of last year, according to figures released on December 10 by the China Association of Automobile Manufacturers (CAAM).

Wu Shuocheng, an analyst at consultancy Menutor Consulting Shanghai Co, said the local market would be affected more than the nationwide market.

"Middle- and high-end models will see a rise in sales," as purchase restrictions tend to encourage consumers to buy more pricey cars, Wu told the Global Times on Monday.

He also said more cities would follow suit, in order to tackle pollution and traffic congestion.

The sudden announcement by Shenzhen was as abrupt as the previous purchase limiting moves by other local governments, and it triggered a buying rush in the local market.

Immediately after hearing media reports about the policy, which was announced just one hour before it became effective, Guo Weiwei, a 29-year-old white-collar employee in Shenzhen, rushed to a local car dealership with a colleague of hers who had already preordered a car.

They successfully squeezed into a big crowd surrounding the dealership to complete the purchase before the 6 pm deadline, Guo told the Global Times on Monday.

While her colleague secured the purchase at the preset price, those who rushed to the dealership without having preordered were no longer entitled to the previous favorable buying terms, according to Guo.

The Monday announcement - which came after earlier promises by the local traffic police department that they would not impose vehicle purchase restrictions - spurred complaints about seemingly arbitrary administrative actions taken by local governments.

"How could the car purchase limits be unveiled such a short time before going into effect?" asked Guo.

As the country is revising its Legislation Law, similar occurrences are not likely to happen in the future, analysts said.

The bi-monthly session of the National People's Congress Standing Committee, voted on Sunday to accept a bill for reviewing draft revisions to the Legislation Law, Xinhua reported on Sunday.

The draft revisions include a ban on local governments issuing regulations that limit the rights of citizens and organizations or increase their liabilities without a pre-existing legal basis, unless there are special circumstances.

Posted in: Economy

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