Guangzhou's city government says it will consult the public on its controversial plan to limit car registrations, which would see the number of new licences capped at 10,000 a month - half sold through auction and the rest drawn in a lottery.
Announcing details of the policy at a press conference yesterday, the city's Transport Commission said the public would be given 20 days to express their opinions on how best to allocate the quota.
No car registrations will be processed for cars sold this month, with further details of the quota policy needing to be rolled out. It is expected to be implemented from next month.
The Yangcheng Evening News reported that money generated from the auctions would be used to fund public buses and bidders will have to pay a deposit before participating. It also said that people applying to register cars would have to have been residents of Guangzhou for three years or more.
Lottery draws will be held on the 26th of each month.
Luo Jialiang, the 53-year-old owner of a second-hand car business with more than 30 cars in stock, said he was worried that his business would have to close as a result.
'Under such a policy, only rich people who can afford to bid for car registration and the government, who would pocket the extra income, would benefit,' he said. 'It's not fair.'
In Shanghai, which uses a car- licence-plate auction to limit the number of new vehicles on the roads, a licence plate can cost more than 60,000 yuan (HK$73,500).
The Guangzhou commission has come in for harsh criticism for introducing the quota system in haste, leaving the public with no time to prepare. The new policy was announced late on the night of June 30, just hours before its implementation on July 1.
Second-hand car dealers have been especially critical of the new policy, with about 600 protesting on Monday in front of the Guangzhou city government and Guangdong provincial government offices.
They demanded the government consider granting a one-year grace period for second-hand dealers so that they could get rid of their stock or exempting used cars from the quota, arguing that second-hand sales would not increase the number of cars on the city's roads.
The authorities say the quota is needed to curb the city's worsening traffic congestion and air pollution. They also say that announcing the plan ahead of time would have resulted in many people rushing to buy cars, which would have reduced the effectiveness of the quota plan.
Guangzhou is the fourth mainland city - after Beijing, Shanghai and Guiyang , the provincial capital of Guizhou - to have introduced administrative measures to limit car sales.