Owning a car a fading dream in China?

GUANGZHOU - Huang Jie, a 26-year-old professional working in Guangzhou, felt lucky when hearing his Beijing friends complain that they couldn't buy a car freely due to the capital's car number plates issuance lottery.

But Huang doesn't feel so fortunate anymore, since just last week the bustling southern city launched a car quota system.

The city government announced on the night of June 30 that starting July it would only allow 120,000 passenger vehicles to be registered over a one-year trial period, during which only 10,000 licenses will be handed out each month.

The city said more detailed car quota plans will be issued by the end of July.

Having got his driver's license and saved up money to buy his first car, Huang felt frustrated and upset on hearing the news.

Over the years as Chinese have earned more, their dreams of car ownership have become increasingly realizable.

Due to local policies, however, even if they can afford to buy one, often they can't legally do so.

Unrealistic dream of car ownership

Guangzhou is the third Chinese city to cap small passenger vehicle registrations after Beijing and the southwestern city of Guiyang, while Shanghai is the only Chinese city to use an auction system to control the number of cars on its roads.

After Guangzhou's move, the three major metropolises in China now have car registration restrictions. And other cities may follow, according to auto industry insiders.

"We shouldn't view the existing restriction policies as isolated examples. Since many cities face the ever-increasing pressure of traffic congestions and emissions in the process of urbanization, more and more cities are expected to adopt such kind of policies," said Zhong Shi, an auto industry observer in Guangzhou.

Liu Peng, director of an auto website, predicted that Guangzhou's move will spur some second-tier cities, especially provincial capitals, to issue similar policies on car ownership.

The number of cars registered in Beijing passed 5 million in February 2012, 11 months later than previously predicted as a result of the car number plates issuance lottery that has been in place since 2011, according to Beijing's traffic police bureau.

There were 2.4 million motor vehicles registered in Guangzhou as of May, with an annual increase rate of 19 percent, according to the Guangzhou Automobile Sales Association.

Traffic jams in Guangzhou have been getting worse. Average speeds during rush hours have slowed to 20 km per hour and are expected to drop further.

Growing motor vehicle emissions have also worsened the city's air quality. That's why the Guangzhou municipal government launched the recent policy, said Xian Weixiong, director of Guangzhou's commission of transport, last week.

Huang Jie admitted that cars run slowly on the congested roads in Guangzhou, but says he still wants to own a car because it's more comfortable to wait in his own car than in a crowded bus.

"My friend He Qian in Beijing did not lose her passion for participating in the lottery system to get a license plate, though she failed to be the selected for 14 consecutive months," Huang said.

Makeshift policy?

Some people believe that car license plate control is a timely prescription for the city's traffic woes, while others doubt its necessity and effect or complain about its negative effect.

Jiang Libiao, professor at the School of Mechanical and Automotive Engineering under the Guangzhou-based South China University of Technology, said the restriction on numbers of cars can only help postpone serious traffic gridlock but can not solve the problem radically unless road resources are taken full advantage of and the public transport system is perfected.

As the big markets in these mega-cities start to shrink, the country's flourishing auto industry suffers.

Zhang Zhiyong, an auto-industry insider, said a batch of big cities in China, which share similar situations including population, levels of economic development and scales of car market with Guangzhou, are most likely to follow the restriction policies to counter traffic woes.

Therefore, the booming auto industry in the world's largest auto market may be battered hard, Zhang added.

Everbright Securities analyst Zhou Liqian echoed Zhang's views and said Guangzhou is not the only city facing serious traffic congestion. Many of the country's big cities including Hangzhou, Chengdu, Shenzhen and Nanjing have been struggling with gridlock and other traffic-related issues.

China outpaced the United States as the world's largest auto market in 2009. It is estimated that the planned production capacity of China's 30 major automakers will reach 40 million vehicles by 2015.

Whereas, some 18.50 million motor vehicles were sold in China in 2011, a mild increase of 2.5 percent from 2010, according to China Association of Automobile Manufacturers (CAAM).

If the car plates supply restriction went viral, the auto markets would have more pressure.

"The growth of China's domestic demand has mostly come from the real estate and auto markets since 2008. The two markets have played vital roles in coping with the global financial crisis. The slower growth in the auto market may put considerable pressure on the country's maintenance of steady economic growth," Zhou said.

Meanwhile, automobile stocks dropped after the Guangzhou government announced that it would start to limit auto purchases.

Chen Qingtai, a researcher with the Development Research Center of the State Council, said China has stepped into the "auto era" at such a rapid pace that it has to face a series of challenges such as diminishing land resources, worsening environmental pollution, energy shortages and terrible traffic congestion.

But the country should give some consideration to the auto industry when it makes blueprints for economic and social development, he added.