"It's been very quiet since."
Guangzhou's move follows similar restrictions in Beijing and Shanghai, illustrating how major Chinese cities are increasingly resorting to quotas to curb vehicle emissions and ease traffic congestion.
Mizuho Financial Group predicts that will slow car sales, which could threaten carmakers such as GM and VW that depend on growth in the world's largest vehicle market to counter declining demand in Europe.
China, the biggest producer of carbon emissions, is home to 16 of the world's 20 most polluted cities. Vehicle emissions account for more than a fifth of the most harmful particulates in Beijing.
In Guangzhou, the average vehicle speed has dropped to about 20km/h and is expected to slow further next year, the government says. There were 2.41 million vehicles in the city at the end of May, more than triple the number of available parking spaces. That spurred the city to make its June 30 announcement that just 120,000 new licence plates would be issued in the 12 months from July 1.
"Even if further large cities in China do introduce car licence controls, we don't expect it to affect the growth potential over many years to come," Andreas Hoffbauer, a VW spokesman in Beijing, said. "Second-and third-tier cities will make the largest contribution to growth in the Chinese auto market."
Despite Guangzhou's controls, the central government won't allow too many cities to impose limits on vehicle ownership because maintaining a stable economy is a priority, predicted Cao He, analyst with China Minzu Securities in Beijing.
"If too many cities follow suit, it will surely damp vehicle sales and economic growth."
Nationwide vehicle demand has already slowed this year as economic growth has flagged and fuel prices have jumped. Passenger-vehicle deliveries increased 5.5 per cent in the first five months, according to the state-backed China Association of Automobile Manufacturers.
The latest curbs are a further blow for dealerships, where average inventory bloated to more than two months of sales by the end of May, a glut that the China Automobile Dealers Association has said is unsustainable.
- Bloomberg