BEIJING, June 24 (Reuters) - China’s top economic planner is appealing to adjust or scrap the Beijing municipal government’s policy to limit new car quotas, the National Business Daily said on Friday.
In a report submitted to China’s State Council, the National Development and Reform Commission also linked Beijing’s steps to tackle ever-worsening traffic gridlock to slowing auto sales in the country, the newspaper said.
The NDRC along with other unspecified organisations were also appealing to make adjustments to similar policies by other local governments, it said, but did not elaborate.
NDRC and Beijing city government officials could not be reached immediately for comment.
Geely Automobile Holdings Ltd surged 8.1 percent to HK$3.09 by mid-afternoon and Guangzhou Automobile Group Co Ltd was up 8.0 percent at HK$9.10. The blue chip Hang Seng Index rose 1.4 percent.
Mainland listed auto stocks rose more moderately. SAIC Motor gained 4 percent to 19.2 yuan and FAW Car rose 3.9 percent to 14.4 yuan, both outpacing the benchmark index
The Chinese central government in early 2009 issued a raft of stimulus measures, including tax incentives for small cars, which helped China surpass the United States as the world’s top auto market.
It scaled back the incentives in 2010 and scrapped them completely at the beginning of this year.
Automobile demand has been cooling down, with monthly sales in May declining for the first time in more than two years.
Industry observers expect slow sales to continue into the summer months followed by a mild rebound in Autumn.
Reporting by Fang Yan and Ken Wills; Editing by Jacqueline Wong