Even Beijing's new-car lottery faces bottle-neck

BEIJING Wed Jan 26, 2011 1:40am EST

BEIJING (Reuters) - Potential car buyers tried their luck in Beijing's first lottery for new-car registrations on Wednesday, but most were left empty-handed, victims of the city's efforts to tackle its ever-worsening traffic congestion.

The computerized lottery process, broadcast live on national TV, finished in roughly 20 minutes, with 17,600 winners out of a pool of 187,420 applicants.

"I am so disappointed!" said 32-year-old office worker Alan Lin, as he looked at his notebook computer displaying the lottery results posted on a website.

"And I just don't understand why all of a sudden we have to win a lottery to buy a car. I thought the government has been encouraging domestic consumption."

The answer to his rhetorical question was evident just a few meters away on the city's crowded streets.

China in 2009 eclipsed the United States as the world's top auto market, where global giants from General Motors (GM.N) to Bayerische Motoren Werke (BMWG.DE), have racked up eye-popping sales as the nation's wealth grows.

While bolstering the bottomline of foreign auto giants and bringing convenience to lives of some Chinese, the booming car culture is also causing havoc in major cities, including the capital.

In parts of Beijing -- which is projected to have 7 million vehicles on the road by 2012 -- a distance that might take 45 minutes to walk could, in a car, easily turn into a one-hour drive even during non-peak periods.

As the number of new car registrations began accelerating beyond all projections, the Beijing city government sought to control the growth by capping new car registrations this year at 20,000 per month. Even so, that will only slow the trend of worsening congestion.

For January alone, roughly 10 out of every 11 applicants in the lottery were turned away, forced to wait for another chance in subsequent months.

The move is estimated to slow the growth in the number of new cars on the road by roughly a third this year from last year's record of about 800,000, but many drivers and other observers are skeptical the new policy will be effective.

"It's good that the government finally decided to do something after so many years," said Chen Liang, a cab driver who said he once was stuck in traffic for 3 hours on his way to the airport.

"The quota will put fewer vehicles on the road but will do little to ease the current situation."

Beijing is the second Chinese city to take steps to ease its congestion. Shanghai had years ago started to collect 30,000 to 50,000 yuan (about $4,600-7,600) for each car owned.

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