* Details of possible new measures unclear
* Could cut domestic vehicle sales by 2 pct - CAAM official
* But analysts say impact on carmakers unlikely to be big
By Fang Yan and Norihiko Shirouzu
BEIJING, July 11 Eight more cities in China, the
world's biggest auto market, are likely to announce policies
restricting new vehicle purchases, an official at the automakers
association said, as Beijing tries to control air pollution.
Shi Jianhua, deputy secretary general at the China
Association of Automobile Manufacturers (CAAM), did not give
details on the new measures and there has been no word from the
But the industry group warned the planned restrictions could
cut vehicle sales by 400,000 units, equivalent to 2 percent of
domestic sales in 2012.
"We shouldn't simply adopt restrictive policies as they have
seriously dampened demand of the people," Shi told a news
conference on Wednesday.
"It's not good for the healthy development of the Chinese
auto industry or the formation of an harmonious auto society."
Kiyotaka Ise, president of Toyota Motor Corp's
luxury Lexus brand, said he would welcome any measures that give
incentives for the purchase of hybrid gasoline-electric cars.
"Given the size of the market, 2 percent is a lot," he told
reporters in Tokyo, referring to the effect on sales of the
"If the goal is to improve air quality there could be a
business opportunity for hybrid cars," he added. "Perhaps there
is a possibility that low-polluting hybrids could be exempt from
In June, sales of German cars accounted for 26 percent of
total sales in China, followed by Chinese vehicles at 25
percent, Japanese with 18 percent and U.S. cars with 16 percent,
according to CAAM data.
Four Chinese cities - Beijing, Shanghai, Guiyang and
Guangzhou - already restrict vehicles on the road by using
auctions and lotteries to sell a limited number of license
The new curbs will likely include major provincial centres
like Chengdu, Chongqing and Wuhan, Shi said.
Details of any restrictions are likely to be announced by
city governments. Officials at the Ministry of Transport did not
respond to requests for comment.
Analysts said CAAM's prediction on the possible impact of
the new curbs may be an exaggeration and aimed at lobbying the
government against such changes.
"I don't think eight more cities will suddenly implement
curbs at the same time, especially when China's economy is
facing downward pressure and the central government is
encouraging domestic consumption." said Wu Wenzhao, analyst at
The new Chinese leadership under president Xi Jinping has
made improving the quality of life for Chinese citizens a
centrepiece of policy, but stubborn air pollution has become an
example of the challenge Beijing faces.
Last month, the State Council, or China's cabinet, approved
a slew of measures to combat air pollution, including
accelerating the installation of pollution control equipment on
small, coal-fuelled refineries and curbing the growth of
high-energy-consuming industries like steel, cement, aluminium,
The government has made similar promises over the last
decade, but enforcement has often been lacking, especially at
the local level.
Chinese cities rank among the most polluted in the world,
and smog clouds over eastern China, visible from orbit, are
easily found online.
Chinese air pollution is driven by many factors, in
particular by the country's dependence on coal-fired power
plants, but particulate pollution has been aggravated by a
culture that has passionately embraced the automobile as a
symbol of status.
The possible restrictions on new vehicle purchases come at a
time when automakers are bracing for another tepid year of
growth in a market that has been hit by a slowing economy as
well as rising fuel costs.
A Beijing-based auto maker executive said this type of
sudden surge in restrictions was nothing new in China but
admitted that not all firms were ready to deal with it.
"Some of us are on a factory opening binge." said the
executive, who spoke on the condition of anonymity.
General Motors said in April it will add four new
plants in the next three years in China to bring its production
capacity to 5 million vehicles a year.
"There's huge risk if companies are not adding manufacturing
capacity in China in a measured manner," the executive said.