THE NUMBERS GAME: Chongqing-based Lifan Auto's new vehicles crowd a temporary parking lot. More Chinese cities may restrict car purchases to alleviate air pollution and road traffic (LIU CHAN)

Struggling auto dealers in the Beijing market are bracing themselves for more bad news. In the four years after 2014, the number of cars available for sale in the Chinese capital will be restricted to 150,000 per year, a drop of 90,000 compared to 2013.

Beijing announced the policy of restricting car sales in December 2010. Every year only 240,000 vehicles go on sale, making a serious dent in auto makers and dealers' profits. Before the policy was adopted, Beijing's auto market was thriving. In 2010 alone, 920,000 vehicles were sold in Beijing. The sales restriction policy cut 74 percent of car sales in the city.

The purpose of this policy was to alleviate road traffic. But in response to serious air pollution, the Beijing Municipal Government adopted this policy as a measure to reduce carbon emissions. On November 5 it announced that from 2014 the sales quota will be reduced from 240,000 to 150,000 vehicles each year. Among the total, the quota for new energy vehicles will be gradually increased from 20,000 to 60,000 per year and that for ordinary cars will be gradually reduced to 90,000 by 2017.

Besides Beijing, cities like Tianjin and Shijiazhuang, capital of Hebei Province, are also considering restricting car sales because of air pollution.

Su Hui, Deputy Secretary General of China Automobile Dealers Association, said one fourth of Chinese cities are suffering from serious air pollution and road traffic, so it will be an inevitable trend for other cities to limit car sales. This is presently the most effective, and a makeshift way to solve air pollution and road traffic.

According to figures from the China Association of Automobile Manufacturers (CAAM), in the first half of this year, 10.78 million automobiles were sold in China, ranking first in the world. All the world's major auto makers have entered the Chinese market. Since Detroit declared bankruptcy, China has become the main target of international auto makers. It is uncertain whether restrictions of car purchases in some Chinese cities will make these major players more prudent when developing the Chinese market.

Local brands suffering

Li Wei, a dealer of Chery cars in Beijing, feels great pressure from the car sales quota. He failed to fulfill his sales target in 2012. Anhui-based Chery is a leading homegrown carmaker. Its first car model QQ was once popular across the country.

Like Chery, other Chinese auto makers also have a shrinking market share in Beijing. Dong Feng Aeolus used to have three dealerships in Beijing, but now there is only one; the number of Haima Automobile's dealerships in Beijing has reduced from four to three. A luxury model C30 from Great Wall Motor was priced at 64,500 yuan ($10,522). To scramble for market share, dealers cut the price to 48,000 yuan ($7,830) in June, but sales performance was still not satisfactory.

If other cities also adopt a similar policy of buying restrictions, "it will be more difficult for Chinese brands to get by," Li said. Some dealers will have to close.

At a press conference held by CAAM on November 11, Chen Shihua, Director of CAAM's Industry Development Department, described the production and sales volume of passenger vehicles in China's auto industry in October as increasing remarkably, but market share of Chinese brands continued declining in the passenger vehicles market.