Sometimes, it’s not the money that will prevent you from owning your dream car. Just ask anyone in Beijing, which is probably the first city in the world to have a “license lottery”. Yes, you heard that right.

Here’s a fun figure: the annual new vehicle quota, which was 240,000 in 2013, fell to 100,000 in 2018, Among those 100,000 vehicles, only 38,000 will be issued to gasoline-powered cars, while another 54,000 will be issued for electric vehicles. The government’s target is to cap the number of locally registered vehicles at below 6.3 million by the end of 2020. For a city of 22 million people, that is very few cars on the road.

The reason for a licensed lottery makes more sense if you look at it from another viewpoint. The traffic congestion and air pollution are major headaches for Beijing, and since 2011, the Chinese government has used a lottery system to restrict the number of cars registered every year.

But there’s more. Aside from the license lottery, which happens biweekly, the government also requires each licensed gasoline vehicle to remain idle for one day a week. The day will be determined by the registered license-plate number.

To counter all these hassles, many residents would opt to register their vehicles outside the city to avoid the long wait. But the government is closing that loophole in November 2019, where cars without a local license will be allowed only 12 permits to drive within the city per year, with each permit valid for just seven days.

This license cap helps the government to control its pollution and traffic congestion, but has been one of the major factors why car sales are down in China as a whole. Cui Dongshu, secretary general of the China Passenger Car Association said that the government “should moderately relax such restriction policies to satisfy people’s demand for new cars.”

But it is these restrictions that remain a big reason why ride-hailing companies such as Didi Chuxing and Shouqi Limousine & Chauffeur have gained millions of customers in recent years, with Beijing leading in the number of active users.

Image from: Sustainable Transport in China

“China’s car ownership restriction has made people consider other alternatives,” says Bill Russo, chief executive officer of Automobility Ltd., a Shanghai-based consultant. “It’s changing the attitude of the consumers from necessarily owning a car to booking a car on demand.”

China’s national government has identified the automotive sector as one of the strategic industries it needs to help develop its economy, so it still wants people to buy more cars, especially electric vehicles. But should the “license lottery” remain in full effect, people may not be able to buy cars even if they wanted to.

What do you think about this license lottery? Do you think Malaysia should implement something similar? Leave a comment below!

This City Requires You To Win A License Lottery To Buy A Car?!