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In Beijing, car ownership rules drive auto sales

As the Chinese capital limits the number of cars to ease pollution and gridlock, people who had been putting off buying a car are taking the plunge and entering the license plate lottery.

January 24, 2011|By Barbara Demick, Los Angeles Times

Reporting from Beijing — Nothing like being told you can't to make you want.

It was only after the Beijing municipal government last month announced regulations to severely limit the number of automobiles in the gridlocked, smog-covered capital that Guo Jian, a burly 38-year-old salesman of eyeglass frames, decided that he really did need a car.

No matter that he doesn't know how to drive, Guo bicycled over to the motor vehicle bureau to enter a newly instituted lottery for a coveted Beijing license plate. If he succeeds in getting one of the 20,000 plates to be issued this month, he'll plunk down about $30,000 — that would be in cash, he says with an immodest grin — to buy the Toyota Camry he's been eyeing.

"I've been getting to that stage in life where I want to have a car. I was thinking about it for a couple of years, but I'll admit — when they changed the law, that was what got me to pull the trigger," said Guo as he filled out his form.

More than ever, Beijingers want their own set of wheels — that would be four wheels, please — and newly imposed restrictions on car ownership have only further whetted their appetites. In one 24-hour period just before the stricter regulations took effect, up to 160,000 cars were sold, many of them to people who didn't have driver's licenses.

"It has become a mania of sorts," said Jia Xinguang, an independent automobile industry analyst based in Beijing. "All Chinese admire the American way of life, and just like Americans, they feel they want their house as well as their own car."

A study last year by IBM of 20 large cities put Beijing neck and neck with Mexico City for the worst traffic in the world. Beijing is girded by concentric ring roads that feel like nooses strangling the city during peak traffic hours. It is not uncommon for trucks headed into the city to be backed up for days. One epic jam in August lasted nine days and during a rainy Friday in September, the capital almost came to a standstill, prompting concerns from the Politburo about how the government of the world's most populous country could function if nobody could move.

Under pressure to fix the problem, the government is now limiting the number of new license plates in Beijing to 240,000 per year — about one-third of the number of plates issued in 2010 — to be awarded through the lottery system. Only long-term Beijing residents may register cars in the city and cars with out-of-town plates can't enter, a measure as drastic as if New York banned the bridge-and-tunnel crowd.

The new rules were announced Dec. 23 at a 3 p.m. news conference and took effect at midnight.

That left just nine hours for people to stampede to the automobile showrooms.

A blogger for a popular forum on the Web portal Sohu.com recalls viewing the news conference live online; and by 3:30 p.m. starting to call for advice on how to buy a car. As soon as she got off work, she asked a colleague to drive her to a dealership. At 9:38 p.m., she had the keys to a Peugeot 307 after using her credit card to pay the $19,000 price in full. Even as she left the shop at 10:30 p.m., others were streaming in to buy before the deadline.

Seeing it as their last chance to own a car, some people took desperate measures. At a BMW showroom, according to a report in the Xinmin Weekly, a buyer used a key to scratch a brand-new car and then announced, "No one wants this car anymore, right? Then I'll take it!"

You Zongyun, a Honda dealer, boasted of having "three months of sales in the month of December alone." He said November was almost as strong because "people had heard the rumors, so even before they got confirmation, there was a rush to buy."

Demand under the new lottery system is even more keen. For the first allotment of 20,000 license plates to be handed out this month, there are 210,178 applications, according to the government.

But even well before the new restrictions, the Beijing car craze was moving full speed ahead.

Car registration in the capital has increased to 4.8 million from 2.8 million since 2005, with 700,000 new cars registered in the last year alone.

Since the 2008 Summer Olympics, Beijing officials had tried lesser measures than the lottery, including a rotating system that bans passenger cars from being driven one day a week depending on their plate number, a bicycle sharing program and specially designated bus lanes.

Major new public transit initiatives are also underway. In late December, for example, Beijing opened five new subway and rail lines.

But Beijing's transit system is not nearly as well designed as the one in Shanghai, which has a larger population but just one-third of the number of cars. (Shanghai has imposed limits since the 1980s on the number of autos that can be registered in the city and sells license plates through an auction system.)

Besides the increased traffic in Beijing, the run on car sales has resulted in such practical problems as where to park the vehicles.

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