China proposed new measures to boost new-energy vehicle (NEV) and home appliance consumption, a move that would release demand for millions of vehicles in cities across the country, analysts said on Sunday.

New restrictions on driving or purchasing NEVs will not be allowed, and existing restrictions should be removed according to local conditions, including pollution and traffic control, said a statement jointly released by the National Development and Reform Commission, China's top economic planner, and another two departments on Thursday.

The new measures also provide support for different sectors, such as automobile research and development, rural automobile consumption, second-hand automobile circulation, and related infrastructure improvement.

"Besides the consumption-boosting effect, it also sets up a direction for the industry and indicates there is a promising market for NEVs in China," Cui Dongshu, secretary-general of the China Passenger Car Association, told the Global Times on Sunday.

Amid the auto industry's flat market, "methods to boost consumption in the auto market are still being rolled out and consumer confidence has improved in first-tier cities such as Beijing and Shanghai," Cui said.

Auto consumption has weakened since the end of 2018 amid an intense world economy, and new car sales in China dropped 2.76 percent to 28.02 million units in 2018 year-on-year - the first decline since 1990, according to media reports.

In response to suspicion among netizens that the measures could be difficult to implement in metropolises due to traffic pressure, Cui said that "the traffic problems could be eased by upgrading the traffic management systems."

Cities like Beijing and Shanghai should address traffic in different areas based on their different levels of congestion through corresponding driving restrictions, and the restrictions on NEVs could also be eased in some less-crowded areas in the cities, he explained.

Guangzhou and Shenzhen in South China's Guangdong Province on June 2 announced plans to ease restrictions on purchasing small- and medium-sized passenger cars.

Former NEV promotion methods focused on sectors such as online car-hailing and taxi industries, while new measures released by NDRC are a much broader effort, Gao Jian, an industry expert, told the Global Times on Sunday.

The market could see a new round of increases under the efforts, Gao said.

NEV-related shares surged after the statement was released. Chinese electric vehicle start-up Nio closed at $2.76 in New York on Friday, up 4.15 percent, while Geely closed at 12.84 HKD ($1.64) in Hong Kong on Thursday, up 2.23 percent.
Newspaper headline: Country to relax NEV purchase restrictions