China Killing Its Own Car Market: Car-Rationing Spreads To Other Cities

Bertel Schmitt
by Bertel Schmitt
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china killing its own car market car rationing spreads to other cities

The sprawling city Guangzhou in southern China sprung a nasty surprise on its (pop. 12.7 million citizens: it drastically slashed the number of new cars being registered. Observers predict that this move could have far-reaching consequences on the Chinese car market.

On Saturday night, Guangzhou’s city government announced that it will only allow 120,000 passenger vehicles to be registered over a one-year trial period, China Daily reports. Only 10,000 licenses will be handed out per each month. The new quota system went into effect today.

Currently, the city adds more than 30,000 units to its streets each month. It is currently unclear how the limits will be administered. The city announced that details will be forthcoming later.

Guangzhou is the third Chinese city to cap passenger vehicle registrations.

Shanghai limits its registrations to 20,000 per month and has been auctioning off its license plates for many years,, Prices are hovering at around 60,000 RMB ($9,400) per plate.

Beijing started limiting car new registrations to 20,000 per month in January 2011. The plates are assigned via a lottery system. This system caused great frustration as many plates were snapped up by people who did not buy.

Guiyang, the small capital of southwest China’s Guizhou province, introduced a similar lottery system last year. Only 2,000 plates are made available each year.

While the Shanghai system had been seen as an oddity, all eyes were on whether Beijing would set an example for other cities. Apparently, this is the case. “Should other cities follow suit, we can expect to see the Chinese car market fall considerably in the next few years,” says Chinacartimes.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Toucan Toucan on Jul 01, 2012

    China tackles demographic dynamics unknown to the rest of the world so countermeasures will be one of its kind as well. One child policy then, one/no car policy now. Clogged, paralyzed cities do not run businesses well and Chinese are born business people. It's perfectly rational, in terms of costs-benefits, then.

  • CJinSD CJinSD on Jul 01, 2012

    Get ready for China to become the largest auto exporter the world has ever known. This is just more of the same: Warfare as 'business.' Expect the Joe Bidens of the world to celebrate it just as they celebrate killing female babies.

  • Namesakeone Namesakeone on Jul 01, 2012

    And GM took all of those measures (killing Pontiac and Saturn but sparing Buick) to make inroadds into the burgeoning Chinese market. I bet someone at the Renaissance Center in Detroit (GM World Headquarters) is screaming "NO!"

    • Toucan Toucan on Jul 01, 2012

      > I bet someone at the Renaissance Center in Detroit (GM World > Headquarters) is screaming “NO!” That was a good laugh. "Renaissance Center" and "NO!". Thank you.

  • Ron B. Ron B. on Jul 01, 2012

    China... if you lived there you would know that car isn't necesary .you are bussed to your work,you are bussed back to the mgalopolis apartment building (small city in western terms) at night. Your food etc can be bought at street level at any one of myriad of market places. Once a year you are permitted to return to your home province for the new year celebrations and you are permitted to return to your place of work. You do this for several years until You become old and you die. why do you need a car in the workers paradise?