With the introduction of the new regulation on car-hailing services, residents in major cities are being encouraged to use mobility services rather than make car purchases.

Boston Consulting Group predicted that the Chinese auto market will shrink 2% each year over the next decade, based on a 5% decline in individual purchases for private ownership and a car-hailing fleet replacement rate of 3%.

Car-hailing services enable customers to travel by car without owning a vehicle, and so users bypass the upfront costs of a car purchase, and the costs that come with ownership, including the cost of a license plate in the major Chinese cities that restrict car purchases. 

Nielson's February report summarized that 67.8% of respondents who do not own cars "feel there's no need for a private car". A total of 32.4% of Chinese private car owners surveyed said they wouldn't buy another car and 9.7% were considering selling their cars.

Xiaoming Liu, vice-minister of transportation, said the new rules will support the development of online car-booking platforms and encourage private cars owners to provide ride-sharing services to promote the sharing economy, ease congestion in cities and reduce air pollution.

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