Nanjing, eyeing gridlock, considers limits on new license plates
China's eastern Nanjing city is studying whether to restrict new vehicle license plates to reduce traffic congestion, according to an official report posted Monday, despite concerns it could counter central government moves to boost car sales.
Car industry consultant John Zeng, managing director of LMC Automotive, said such a policy would hamper Beijing's efforts to stimulate auto sales as China struggles with the slowest economic growth in 25 years.
"We are not expecting local governments to issue any policies against the policy from the central government, so I would be surprised if they launched the policy this year," he said.
A slowdown in the auto market began last year as economic growth weakened, prompting the government to cut taxes on cars with smaller engines from October through the end of 2016.
The tax cut has helped drive a rebound in new-vehicle deliveries. Car and light-truck sales in China increased 8.1 percent year-on-year in the first six months, outpacing a forecast of 6 percent growth for the whole year, according to the China Association of Automobile Manufacturers.
If Nanjing enacted the policy, it would be the first city to restrict the issuance of license plates since 2014.
Similar restrictions on new plates enacted in at least seven cities, including Beijing, Shanghai and Hangzhou, have helped shift sales growth from major metro areas to smaller, lower-tier cities.
Nanjing is studying a range of policies to reduce traffic, including congestion fees and limiting which days certain number plates can operate, according to a report posted on the city government¡¯s website.
Yale Zhang, managing director at Automotive Foresight consultancy, said plate restrictions could provide a fleeting boost to sales if consumers rushed to buy cars in expectation of restrictions being enacted.
"It can easily double or triple sales" in the short-term, he said.
"We are not expecting local governments to issue any policies against the policy from the central government, so I would be surprised if they launched the policy this year," he said.
A slowdown in the auto market began last year as economic growth weakened, prompting the government to cut taxes on cars with smaller engines from October through the end of 2016.
The tax cut has helped drive a rebound in new-vehicle deliveries. Car and light-truck sales in China increased 8.1 percent year-on-year in the first six months, outpacing a forecast of 6 percent growth for the whole year, according to the China Association of Automobile Manufacturers.
If Nanjing enacted the policy, it would be the first city to restrict the issuance of license plates since 2014.
Similar restrictions on new plates enacted in at least seven cities, including Beijing, Shanghai and Hangzhou, have helped shift sales growth from major metro areas to smaller, lower-tier cities.
Nanjing is studying a range of policies to reduce traffic, including congestion fees and limiting which days certain number plates can operate, according to a report posted on the city government¡¯s website.
Yale Zhang, managing director at Automotive Foresight consultancy, said plate restrictions could provide a fleeting boost to sales if consumers rushed to buy cars in expectation of restrictions being enacted.
"It can easily double or triple sales" in the short-term, he said.
