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Restriction on Vehicles Sales Unlikely to Affect Car Manufacturers

Restriction on Vehicles Sales Unlikely to Affect Car ManufacturersThe plans to restrict vehicle sales in eight more cities in the effort to curb traffic and pollution have not deterred car manufacturers saying that they are not worried since the organic growth in the biggest auto market outweighs any restrictions. Environmentalists also say that such measures are unlikely to make a dent in the efforts of controlling air pollution.

New car sales in four Chinese cities are already restricted. The city ofShanghai,Guangzhou,BeijingandGuiyanghave already limited the number of license plates and is selling them to consumers through lotteries and auctions. Just last week the China Association of Automobile Manufacturers said that the eight additional cities will soon join Shanghai and Beijing in restricting new car purchases but still government officials are still to spell out the policy.

Also insiders said that the additional restrictions is likely to be implemented by limiting license plates will not affect overall sales inChina. They say that the dent that the measures will be felt on sales will be made up by the growth elsewhere in the vast market inChinaas the wealth is spreading to smaller lower tiered cities. Based on a recent study by a marketing research firm shows that around 70 percent of prospective car buyers are likely to come from a tier 3 or tier 4 cities which prompted major car makers as well as indigenous Chinese automakers to shift their attention to these low tiered cities.



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