More Chinese Cities Mull Restrictions on Car Buying

Eight large Chinese municipalities are likely to enact regulations to limit purchases of new vehicles in an attempt to combat worsening smog and traffic, according to the China Assn. of Automobile Manufacturers.

Shi Jianhua, the group's deputy secretary general, tells reporters that the restrictions could slash the country's annual auto sales by 400,000 vehicles, or 2%. He doesn't predict when the new rules might be adopted.

The cities Chengdu, Chongqing, Hangzhou, Qingdao, Shenzhen, Shijiazhuang, Tianjin and Wuhan would join Beijing and Shanghai, which already have policies to discourage car buying. Shanghai auctions a limited number of registrations to the highest bidders. The cost of a license there has soared to about 90,000 yuan ($14,600) roughly four times the price of the cheapest Chinese-brand cars.

Such quotas take the biggest toll on domestic automakers, which cater to budget-conscious customers, Jianhua contends. Bloomberg News notes that when Beijing began auctioning a limited number of licenses in January 2011, the market share of Chinese makes plunged by more than half that year to 9.7%.