The China Automobile Dealers Association estimates that new car sales in Beijing are likely to decline by 50% this year because of the city’s new license plate policy.
Beijing will limit the number of new license plates it will issue this year to 240,000 to help control traffic congestion. Car buyers will have to draw lots before obtaining a vehicle license plate.
Business Insider reports that compared to other manufacturers, US automaker GM will probably be the most vulnerable to the new policy. This is because China has become GM’s largest single market since the first half of 2010, surpassing its home market.
In the first 11 months of 2010, automakers in China shipped a total of 16.4 million vehicles, up 34% year-on-year. Statistics from the Beijing Municipal Commission of Transport show that the total number of vehicles in the city stood at around 4.8 million vehicles, up almost 85% from 2005.