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China Pollution Restrictions On New-Car Registrations Spur Scramble

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BMW 5-Series in China

BMW 5-Series in China

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If China's plans to limit license plate availability were designed to cut car buying, they're not exactly working so far.

Anticipating further restrictions to cut car use--in the midst of choking pollution in many of China's cities--car sales rose a full 13 percent last month.

According to Bloomberg, retail deliveries of cars, multi-purpose and sport utility vehicles topped 1.5 million units in April.

Several large Chinese cities have announced plans to restrict license plate quotas, in an effort to reduce traffic and airborne pollution.

Predictably, this has led to tens of thousands of drivers moving forward purchase decisions, buying up vehicles before restrictions come into force and it's too late.

MORE: China Buys More Cars, But U.S. Trounces It In Plug-In Cars

In Nanjing, one public security bureau has even reported a salesman spreading rumors of license plate quotas in order to drum up extra sales. Sales have surged by up to 40 percent at some dealerships in the city, according to a state-backed radio station.

Several import automakers have profited hugely from this panic-buying. Ford saw sales rise 29 percent, led by the Focus and midsize Mondeo models.

Toyota sales rose 12 percent and Nissan saw a 15 percent increase. By contrast, GM's 6.3 percent increase is actually the slowest in 14 months, though the brand's new Cruze, unveiled at the recent Beijing show, should turn that around.

ALSO READ: Even In China, Coal Consumption May Be Peaking

Despite the growing market, Honda actually dropped by 3.6 percent, while China's own Great Wall Motors really suffered--dropping its largest margin in five years.

Harry Chen, a Shenzhen-based analyst at Guotai Junan Securities Co. told Bloomberg that the pre-restriction sales boost "could be a factor for the next few months".

After that point, sales are likely to drop sharply--though we may have to wait a while longer to find out whether it has any effect on China's thick city smog problems.

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