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China's record-smashing car sales could run into cloud of pollution

Cars lined up at a Chinese gas station.

With so many new cars on the road, Chinese cities are threatening to limit the number of license plates they sell each year in order to ease traffic and air pollution. Some experts think this will mean a sharp decline for car sales in 2014.

But industry analyst Yale Zhang says it actually means the opposite. 

"If you look at sales numbers, in several cities with these kinds of rumors, the sales demand jumps up quickly," notes Zhang.

It’s called panic buying, and Zhang says it’s one reason auto sales in 2013 were so robust in China. Another reason is China’s rural provinces, where millions are leaving their farms to become the newest members of the urban consumer class, and where there’s still enough room on the roads to drive your car.

"In those inland smaller cities, the traffic jams aren’t serious yet, you still see a lot of room for demand to grow," says Zhang.

As the rest of China slowly fills up with cars, roads in cities like Shanghai and Beijing have been bumper-to-bumper for years.

People like Shanghai physical trainer Mo Yunsheng have sold their cars – Mo bought a Mini Cooper a couple of years ago as a gift for his wife for her hand in marriage.

"I only bought it in order to get married. We never use it," muttered Mo. "It’s easier to get around by subway."

But now Mo and his wife are planning to have a child, so he’s thinking of buying a family-sized car. He’s not sure if they’ll ever use it. Maybe on the weekends, he says, when everyone else hops in their cars to leave the city -- cramming China's expressways with more traffic.

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

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