Less restriction hoped to stimulate growth in car sales

The Ministry of Industry and Information Technology is calling for cities in China that have introduced restrictions on the number of license plates allocated to citizens to increase their allowances in a bid to boost car sales in the world's largest vehicle market.

In a document released on Tuesday, the ministry said it will "actively stabilize vehicle consumption and encourage cities that limit car sales to increase appropriate quotas to promote sales of vehicles and relevant products".

The document came as China's vehicle sales have fallen for two years in 2018 and 2019 and are expected to maintain a downward trajectory in 2020.

The previous estimate of a 2 percent dip by industry organizations may worsen due to the ongoing coronavirus outbreak that has extended plant closures and kept visitors from showrooms.

Sales in the first two weeks of February fell 92 percent from the same period last year, according to the China Passenger Car Association. It expected a 70 percent fall in February.

Cui Dongshu, secretary-general of the association, predicted sales in 2020 would see a 5 percent fall year-on-year.

Another industry organization, the China Association of Automobile Manufacturers, had the same estimate. Its executive vice-president Fu Bingfeng told Reuters that the fall could reach 10 percent in the first half of the year.

Under such circumstances, easing purchase restrictions, usually in cities where people have strong purchasing power, could help change the situation, Cui said.