China Cuts New Car Sales by 40 Percent To Stem Air Pollution

Nov 05, 2013 03:09 PM EST | Jordan Ecarma

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Beijing

The growing smog problem, which has increased as more people own cars, could be a military defense, according to a Chinese newspaper. (Photo : Reuters)

As China's cities struggle with air pollution, officials have decided to reduce new car sales next year by 40 percent, NBC News reported.

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The new regulations will favor electric vehicles and other green technologies in the hopes of stemming the country's worsening smog problems. 

As the world's largest auto market, China is expected to report 17 million in car sales this year, which is 2 million more than is expected in the U.S. With some 200 cities with populations of more than 1 million, the country should see strong auto sales even after the restrictions are put in place, according to NBC News.

Beijing, Shanghai and other cities have already restricted car sales in an effort to reduce air pollution. Some of the crowded freeways in the capital have been temporarily closed as well. Beijing had already limited the number of cars that can be registered in the city to 240,000 each year, but the number will be cut to 150,000 annually.

As fewer cars are purchased in major cities, automakers will likely move their focus to other parts of the country.

Ford will shift its emphasis to other regional markets, including in central and western China, said Ford Executive Vice President Joe Hinrichs, until recently the head of the maker's Asia/Pacific operations.

Volvo, General Motors, Nissan and Volkswagen officials have also said they will focus on emerging cities and areas where the government has been encouraging regional development.

China hopes to become the world's largest market for electric vehicles, which have undersold partly because of concerns about cost and range. In Beijing, the number of electric vehicles that can be registered will be tripled, increasing from 20,000 in 2014 to 60,000 in 2017. The higher number will amount to 40 percent of total vehicles allowed by the city.

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