The Chinese central government has issued a regulation this week aiming at reducing purchases of government vehicles as part of what is described as an austerity drive, according to local reports.

The regulation seeks to reduce purchases of vehicles for personal transportation among local party officials and within certain local and government organisations and departments. The cutbacks will not target vehicles used for essential services, such as emergency and municipal vehicles, and passenger cars used for official duties.

The reports suggest that there are around 2m passenger vehicles in use in China that could be targeted for cuts, so the implications on the market are significant.