Hundred of used car dealers descended on government buildings in the southern Chinese city of Guangzhou this week in protest against new rules which slash by half the number of license plates to be issued in the next year.
The business owners say the measures, aimed at cutting traffic in the congested downtown area, have taken away their livelihood by banning the transfer of license plates between vehicles, stifling the city's once-dynamic used car market.
"You can say that this is a mortal blow for this business," a used-car dealer surnamed Feng told RFA's Cantonese service on Thursday. "The people in this business have no way to adapt, and they are panicking."
Another dealer who attended the protest said no one was buying used cars since Saturday's announcement.
"People in this trade have now either shut up shop or are sitting around doing nothing all day," he said.
"A lot of the business owners here have a large inventory of secondhand cars in storage, and now we don't know what we're to do with them," the dealer said.
He said each dealer's inventory was worth many millions of yuan (hundreds of thousands of U.S. dollars), and some had invested their family's life savings in them.
Local residents said they had previously had access to a dynamic secondhand car market, where vehicles could change hands simply with a change in the registration documents.
"Now, these people have a whole bunch of used cars that they can't sell," said Zhou Jianzhong, from China's Automobile Consumer Association. "They are having to pay maintenance, storage costs, and taxes on them, too."
"If I liked my license plate, before this policy came out, I could just go and buy ... a car and put my license plate on that car," said Zhou.
Now, the new system will plunge buyers of used cars into a bureaucratic nightmare of permits and registration procedures, with fees ranging from 200 to 1,000 yuan (U.S. $30 to $150).
It also sets a three-year minimum period for license plates before they can change owners or be scrapped, and bans the transfer of license plates from one owner to another.
If an owner sells a car, they must purchase a new or used car with exactly the same specifications within six months of selling or scrapping their previous car if they wish to continue using their existing license plate.
The extra trouble attached to buying cars has sounded a death knell for the used-car market, another dealer said.
"No one is buying secondhand cars now," said another dealer, who declined to be named. "They are only buying new ones."
"It would be a bit more fair if the government were to buy back the secondhand cars [from the dealers]," he said.
The Guangzhou Automobile Sales Industry Association said it had been expecting the changes, but called on the government to consider their impact more fully.
"The limited issuance of license plates was going to happen sooner or later," said a spokesman for the group.
"The Association supports the government's policy, but perhaps the government can give a more thorough consideration to the details, the fine print," he said.
Guangzhou, which has a population of more than 16 million, will issue registration plates for only 120,000 small and medium-sized passenger cars for the next 12 months, officials told reporters on Saturday.
The policy is aimed at "ensuring the effective flow of the city's transportation and protecting and improving the air quality," according to statement on the municipal government website. That is roughly half the total number of cars sold in Guangzhou in 2011, official media reported.
The city is the third in China, following the lead of Beijing and Guiyang, to introduce registration plate limits in an effort to combat the escalating number of cars on the roads.
Guangzhou had 2.4 million cars by the end of May, more than double the number five years ago, according to a report in the China Business News.
However, there are signs that rapid growth in nationwide auto sales may now be slowing. Auto sales rose by 9.9 percent in June, year-on-year, compared with a 16 percent growth in sales in May, compared with the previous May.
Reported by Fang Yuan for RFA's Mandarin service, and by Zhou Qianting for the Cantonese service. Translated and written in English by Luisetta Mudie.