Beijing is in a state of confusion after China’s capital drastically slashed the number of license plates available. You literally have to win the lottery to get a plate. Most winners keep the prized (but non-transferable) possession at home. Writes the party organ People’s Daily: “Only about 11 percent of those who won rights to car licenses plates through the new lottery system bought cars in Beijing in January, the first month after restrictions were implemented, according to Chi Yifeng, general manager of Beijing Yayuncun Automobile Transaction Market, the biggest car retail market in China. “
According to the manager, only 2,000 vehicles were purchased citywide after 17,600 plates were approved through the lottery. Instead of buying cars, Beijingers now hoard license plates. The paper found a salesman at a Chery dealership in Beijing who said that just 10 customers with plate numbers visited the shop in January.
Previously, Chi rechkoned that the car restriction regulation would cause about one-third of Beijing’s car dealers to go out of business. Now he forecasts that half will close.
TTAC’s forecast: The limitations will be watered down and will eventually go away.
Chen Jianguo, deputy head of the industrial coordination department of the powerful National Development & Reform Commission (NDRC), already warned that purchase restrictions are not only insufficient to deal with the congestion problem, but could harm consumers and the industry overall, reports Gasgoo. Like many his colleagues in the West, Chen recommends usage-based taxation instead.
On Friday, China passed a new law that decreases taxes on cars with smaller engines, while raising the tax on cars with bigger bore motors, Xinhua reports.