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8 more Chinese cities may curb car buying
Aggregated Source: Shanghai Daily: Business

MORE Chinese cities may impose measures to curb vehicle numbers to ease worsening congestion and air pollution, which could slow the double-digit growth in car sales this year, the China Association of Automobile Manufacturers said yesterday.

Following Shanghai, Beijing and Guangzhou, eight more cities - Chengdu, Chongqing, Hangzhou, Qingdao, Shenzhen, Shijiazhuang, Tianjin and Wuhan - plan to curb vehicle purchases, Shi Jianhua, deputy secretary general of the state-backed association, said. The curbs will cut local deliveries by 25 percent, or 400,000 units, accounting for 2 percent of national sales, Shi said.

Last month, Zhejiang Province held a hearing on granting cities under its jurisdiction the right to limit car purchases if necessary.

However, the association strongly opposes extending purchase limits because it is against the central government's intention of encouraging consumption and they have not been very helpful in solving traffic problems and cutting vehicle exhaust fumes, Dong Yang, the secretary general of the association, said.

Instead the association proposes that local governments should ensure more convenient public transport and increase the scrapping of old cars with high emission levels.

The association is keeping its 7-percent growth forecast for sales this year because of economic uncertainties in the remaining six months although combined sales in the first half of the year hit a better-than-expected 10.78 million units, up 12.3 percent from a year earlier.

Meanwhile the traditional low season for car buying brings risks of liquidity woes to dealerships already struggling to clear their inventory.

The Vehicle Inventory Alert Index, compiled by the China Car Dealership Association, showed that in June inventories at the dealers climbed 4.82 percentage points from May to 56.14 percent.

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Copyright Shanghai Daily: Business