One is customers in first-tier cities who have the ability and willingness to buy cars are limited by the policy, and the other is that the restrictions are hurting sales.

In an interview with the Economic Daily newspaper, Ye Shengji, deputy secretary-general of the China Association of Automobile Manufacturers, said Guangdong's move is good news for the industry, and it will drive consumption.

He said other cities that have vehicle purchase restrictions should adjust relevant policies to encourage customers to buy cars.

Car sales in China had fallen for 10 months in a row by April, according to the CAAM, but automobile sales are one of the main consumption forces in China, accounting for more than 10 percent of total retail sales in 2018, reaching 3.89 trillion yuan.

In the first four months this year, sales of passenger cars and commercial vehicles totaled 8.35 million, declining 12.1 percent compared with the same period in 2018.

The CAAM said the situation is unlikely to get better soon in the world's largest automotive market.

To stimulate auto consumption, the Chinese government released relevant policies early this year to reduce value-added tax in the manufacturing sector and offer discounts in rural areas, which so far haven't shown positive results.

In addition to relaxing vehicle purchase restrictions, Guangdong is coming up with measures to boost car sales in other ways.

According to the Economic Observer newspaper, local authorities in Guangdong will strengthen the industry oversight on vehicle sales, maintenance and parts and set up a transparent system for industry pricing.

For new energy vehicles, the province plans to accelerate the construction of charging infrastructure and clear up the requirements of charging poles in expressway service areas, new parking lots and communities to provide greater convenience for new energy vehicle owners.

The province is also aiming to improve the used vehicle market by simplifying related procedures and promoting the digitization of documents.

For instance, used cars with national V emissions standards will have the ownership transfer period shortened to ease pressure on used car dealers.