The State Council said in a proposal issued on December 24 that local governments that have restrictions on car purchases should loosen the regulations on those curbs, while they are also expected to encourage automobile scrapping and buying new cars.
Since June this year, Guangzhou, Shenzhen and Guiyang, in response to the central government's urge, have gradually loosened or removed vehicle purchase restrictions. In September, Guiyang, the capital of Guizhou in southwest China, cancelled the restrictions and increased the 2019 license plate quotas by 30,000 units based on the 2018 volume. Before that, 100,000 and 80,000 new plates were rationed respectively by Guangzhou and Shenzhen, both in South China's Guangdong province. In addition, South China’s Hainan province eased up on curbs to boost new-energy car sales in July this year.
According to some analysts, 3% sales growth would be contributed to the auto industry if other cities limiting car purchases such as Beijing, Shanghai and Hangzhou were to follow suit. Guangzhou and Shenzhen intend for 180,000 new plates to be issued in one and a half years, with an average of 120,000 units a year. Using the 2018 passenger vehicle sales (23.67 million units) as the baseline, the new quotas will help deliver 0.5% sales rise to the industry.
