CAR dealerships around Hangzhou were packed with people who were in a hurry to buy a car on March 25 before new license plate restrictions came into effect.

Li Wei was among those at a Volkswagen dealership who bought a car before the deadline. He said people were buying cars “like they were cabbages.”

“There was no time to bargain or even take a test drive. We didn’t even touch the car,” Li said after picking a vehicle and signing a purchase contract within 10 minutes.

The rush to buy vehicles occurred when the Hangzhou government announced new license plate restrictions at 7pm that day. The new rules were to take effect only 5 hours later. Under the rules car owners can either bid for a plate or try to win one in a lottery system. However, no new plates will be issued until April 26 as the government collects public opinion about the rules. The government has said the policy may be revised based on the suggestions they receive.

Before the changes car buyers could simply pay a nominal registration fee to get a license plate.

Li said he and his wife rushed to buy a car because, like many others, they were concerned winning the plate lottery would be difficult and bidding would be expensive.

A Volkswagen salesman was also stoking the fire among potential buyers that evening.

“Hurry up! Make your decision. Time’s up,” the salesmen told people in the dealership. “No cash, only cards. We don’t have time to count money.”

The dealership sold 150 cars that day — the number it usually sells in a month. A Cadillac dealership said business tripled the day the plate restrictions were announced.

The new rules and the way they were unveiled were criticized by some residents.

“Why didn’t the government release the news months in advance so people could prepare?” Li asked.

Others said the government was losing the public’s trust because in recent months it had on several occasions denied rumors the city would restrict license plates.

Some residents also said the restrictions were unfair because they applied to suburban areas, where traffic congestion isn’t a problem, as well as downtown Hangzhou.

Lu Xiande, deputy director of the Hangzhou Transportation Bureau, brushed aside such concerns when he told Shanghai Daily “there is nothing absolutely fair in the world.”

The new rules were announced suddenly because “we are determined to ease traffic congestion and air pollution,” Lu said. “So, the earlier, the better.”

Transport authorities said car buyers will have a more than 20 percent chance of winning a plate through the lottery. They added the auction starting price will be 10,000 yuan (US$1,608) and capped at less than 15,000 yuan.

About 280,000 vehicles were sold in the city last year, but in the following 12 months the government plans to distribute only 80,000 plates — 80 percent through the lottery.

Another change will likely have a big impact on the used-car market. The new rule states a secondhand vehicle can only be sold once, which means a used-car buyer can no longer resell their vehicle.

Used-car dealers told Shanghai Daily they would have to move to other cities to stay in business.

“I still have four used cars under my name, I don’t know whether the government will allow me to sell them,” said dealer Zhang Wenying. She added other dealers often keep more cars in stock.

Industry insiders also worry about the long-term effects on business due to the rule changes.

“Nobody is buying cars now,” said a dealer surnamed Liu. “Since the deadline we have done nothing but chit-chat among ourselves.”

Some said new car prices will likely go down as automakers and dealerships compete for fewer customers. Some dealerships have already given vacations to salesmen as customer numbers dwindle.

Hangzhou has more than 1.1 million vehicles while the urban population is less than 4 million. Residents have referred to Hangzhou as the “clogged city” for years.

Authorities have also blamed vehicle emissions for 40 percent of the city’s smog.

Hangzhou is the sixth city in the country to introduce restrictions on license plates. Beijing, Shanghai and Guangzhou are among the others.

Beijing residents can only get a license plate through a lottery. Some say the chance to winning a plate in the capital is less than 1 percent.

Shanghai has monthly car plate auctions in which the average price is more than 70,000 yuan.

By shanghaidaily

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