New rules may hurt Beijing's car market

Updated: 2010-10-22 17:55
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Beijing will implement restrictions to slow rapidly increasing number of automobiles on the capital's roads, but car dealers worry that the rules may jeopardize their business, China Business News reported on Friday.

The government is working on a package program to control car ownership number in the city, officials from Beijing Municipal Commission of Urban Planning said.

The restrictions were to be implemented two years ago, but because of the unexpected global financial crisis, the plan was delayed to protect China's fragile auto market, the story said.

It's not the first time that Beijing's automobile market has trembled in the face of possible restrictions. In 2008, rumors spread that the municipal government would only grant 100,000 license plates a year, the story said.

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As one of the biggest automobile market in China, the soon-to-be-issued restrictions will affect Beijing's entire automobile industry, said people involved in the industry.

Some analysts speculated at the time that if the 100,000-a-year plate-granting rule was implemented that 80 percent of the auto sales in Beijinng would be lost, and half of the city's dealerships would go out of business, according to the story.

Data shows that the number of motor vehicles in Beijing was more than 4.5 million in early September this year. More than 500,000 cars are joining the capital's roads every year, the report said.

According to an estimation issued by the Beijing Transportation Research Center, the city will have 7 million automobiles on its roads by 2015 and the automobiles' average speed will be slower than 15 kilometers an hour.