Daimler is unimpressed by Beijing’s plans to limit new vehicle license plates to 240,000 next year. Daimler still expects double-digit car sales growth in China in 2011.
BMW is similarly sanguine. A spokeswoman told the Wall Street Journal that “these are not the first limitations in Beijing. With the existing ones, we haven’t had any negative experiences. The additional measures aren’t a surprise to us, but it is unclear how they will be implemented. Therefore we can’t say anything yet about the effects.”
Both have reason to be blasé:
First of all, there is a giant loophole in the regulations. If you already have a car, you can buy a new one without drawing lots from the 240,000 pile. The China Automobile Dealers Association expects that at least 160,000 vehicles will be sold in 2011 in Beijing to those who trade in old for new. Some put this number at 200,000 or higher. Remember: Beijing already has 4.7 million cars.
Secondly, most of China’s new car growth is coming for the second and third tier cities, and this is where the wealth moves.
Thirdly, people who buy a “Benz” (as the call a Mercedes in China), or a BMW usually know how to deal with regulations like these. It is already expected that registrations in neighboring provinces will jump.
Daimler knows Beijing well: The city is their joint venture partner. BAIC, largely owned by the city, plans a 400 percent increase in its dealer network before the end of 2011, Gasgoo reports.