As many as eight more major cities could join the four including Beijing, and Shanghai with policies aimed at restricting new car sales as they bid to reduce pollution and ease congestion, according to the China Association of Automobile Manufacturers.

CAAM estimated the move could cut new car sales by as many as 400,000 a year and is lobbying against any further restrictions on the grounds they would hamper economic growth.

When Beijing introduced its lottery system for licence plates, new car sales in the city fell by 520,000 units and people now have to wait years to get a plate. In Shanghai, where licence plates are sold by auction, prices averaged RMB77,800 (US$12,700) last month with observers suggesting this could lead to social unrest with only the wealthy able to afford cars. The wealthy tend to buy luxury cars from foreign car makers to the detriment of affordable Chinese cars.

"Despite the fact the GDP grew only 7% over the first half of the year, production and sales volumes [by] the automotive industry both increased over 10%, greatly aiding the national economy," CAAM secretary general Dong Yang pointed out, cautioning that, if the eight cities all implement policies limiting new purchases, China's total automobile sales would fall 2%.

The cities list by CAAM are Tianjin, Shenzhen, Hangzhou, Chengdu, Shijiazhuang, Chongqing, Qingdao and Wuhan.

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