Wally Edgar Chevrolet - What Happens When You Sell Too Many Cars??

Jan. 5, 2011 - PRLog -- As many as 80 of 420 franchised car dealers in Beijing will go out of business after the city government restricts new car purchases in 2011, Shanghai Securities News reported.

To ease traffic congestion, the city government is restricting new-car purchases to 20,000 units per month beginning in 2011. Because of the restriction, Beijing's car sales this year are expected to drop 33 percent from 2010 levels, the Shanghai-based newspaper said, citing a forecast made by the CHINA Automobile Dealers Association (CADA).

With 19 million residents and nearly 5 million vehicles on the street, Beijing has the highest vehicle population density among Chinese cities. To ease traffic congestion, the city government is restricting new-car purchases to 20,000 units per month.

Because of the restriction, Beijing's new car sales next year will drop to about two thirds of 2010 levels, the Shanghai-based newspaper said, citing a forecast made by the CHINA Automobile Dealers Association (CADA).

The association estimated that new car sales in Beijing in 2010 topped 800,000 units.

Beijing is the first city to restrict monthly new car sales in China.

Analysts fear that other major Chinese cities such as Shanghai and Shenzhen will likely take similar measures to alleviate worsening traffic conditions in those cities.

SOURCE: Auto News China

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