The city's elevated highways are constantly crowded, though only vehicles with Shanghai license plates are allowed to use them during peak hours. Photo: CFP

Shanghai launched new policies to promote auto sales on Wednesday, such as issuing 40,000 more vehicle license plates and giving 5,000 yuan ($703) in subsidies to eligible buyers of new-energy vehicles.

The policies are specific and well-suited to boost automobile consumption, Feng Shiming, an auto industry analyst with Shanghai-based Menutor Consulting, told the Global Times on Wednesday.

"The city releases 10,000 license plates each month. This means the city has added 30 percent to the monthly quota so more people in Shanghai could become car-owners. It will promote the sales of new cars," Feng said.

Shanghai license plate is joked as the world's "most expensive piece of metal", selling at an average of 90,000 yuan per plate through public bidding. 

In the April auction for private cars, the quota increased 2,440 to 13,500, passing the 10,000 mark for a second consecutive month.

The city also rolled out subsidies for certain models, particularly, the new-energy vehicles. 

Also, Shanghai consumers who trade in older models for China's Level-6 emission standard vehicles will be given a subsidy of 4,000 yuan. 

Shanghai will also give an electricity fee rebate of 5,000 yuan to individual consumers who buy electric vehicles or plug-in hybrids from registered automobile enterprises in Shanghai and go through the license registration procedures.

China's auto output rose 2.3 percent and sales rose 4.4 percent in April, according to the Ministry of Industry and Information Technology. The gain ended 21 consecutive months of decline.

In the short term, there will be a significant increase in car consumption nationwide due to the government's policy stimulation, Feng predicted.