China Starts To Restrict City Car Sales

January of this year in Beijing. 

Chinese cities are choking to death. Following hard on the heels of this week’s news of record car sales in China come reports that China’s smog-bound and choking cities are taking the first steps to control air pollution by restricting new car sales. With more than 200 cities with populations in excess of 1 million, manufacturers are not getting worried yet and it will not prove a major problem to their business plans. Car sales in China are expected to be in excess of 17 million vehicles this year, making the territory the largest market in the world, beating the USA by some 2 million vehicles. When you consider that the market for private vehicles has only been deregulated for about 20 years in China, its rise to the largest vehicle market in the world is even more astounding. Of course this surge in private car ownership is being blamed for much of the air quality problems in the territory, although the lack of meaningful pollution controls in the manufacturing sector and the reliance on coal fired power plants must also be seen as partly to blame.

Beijing is suffering from the worst air pollution on record. It was the first city to restrict car sales by limiting the amount of car registrations in the city to 150,000 annually; this means that over the next 4 years, only 600,000 cars can be added to the capital’s streets, which is coincidentally the same amount as was added in 2010 alone. Beijing took the step of also closing some of its highways whilst Harbin, a northern industrial city of 11 million people, had to shut down much of its manufacturing activities when pollution levels reached critical. In many cities, the electric motorcycle has become the transportation of choice and China has laid out plans to become the world’s largest electric vehicle market. However, sales are not meeting expectations with just 11,000 units sold last year despite the existence of a range of subsidies from the government. This is due to range anxiety and the ability for urban residents to find a recharging point. Most urban Chinese live in high rise apartment blocks, which makes recharging inconvenient. The installation of a charging pile costs about USD2,600, which can be as much as 15% of the vehicle cost.