Car Sales or Gridlock? China's Central Government At Odds With Beijing's Car Curbs

With a population approaching that of Australia and car sales of 700,000 new cars, or 890,000 new cars (depending on which issue of China Daily you rely more), Beijing used to be one of the most important car markets in the world’s largest car markets, China. As amply documented by TTAC, the car market in Beijing collapsed completely after city fathers ruled that new registrations have to try their luck in a license plate lottery first.

China’ top economic planners at the National Development and Reform Commission NDRC see their economic plans threatened, and are “appealing” to Beijing to change its policy.

In the first quarter of 2011, only 93,000 cars were sold in Beijing, a drop of 67 percent. Many car dealerships in Beijing are closed and boarded-up.

The NDRC wants Beijing to adjust or scrap its car quota, says Reuters, citing a story in the national Business Daily. In a report submitted to China’s State Council, the NDRC linked Beijing’s steps to the slowdown of auto sales in China. The Beijing market amounted to approximately 5 percent of China’s auto sales. This wasn‘t much as long as the market was growing in the high double digits. Now that China’s market is sputtering, every car counts. In the meantime, Dong Yang, secretary general of China’s automaker association CAAM told Reuters the report was not true.

The NDRC never had been a friend of harsh policies such as the one in Beijing. Chen Jianguo, deputy head of the industrial coordination department of the NDRC, had warned early on that purchase restrictions are not only insufficient to deal with the congestion problem, but could harm consumers and the industry overall.

In April, there were widespread reports that Beijing would exempt EVs from the license plate restrictions. However, these measures have yet to be enacted. There are no EVs to buy, and EV makers are waiting for the rules to come in effect.