Automakers shift gear to focus efforts on smaller cities after capital applies the brakes. Li Fangfang in Beijing reports.

Potential car buyers check out an Audi model at a car market in Nanjing, capital of Jiangsu province, on Jan 11. [Duo Duo / for China Daily]

Car salesman Liu Jun enjoyed the best time of his career in December. After shifting 19 cars in the first 23 days, he was already looking ahead to lavishing his family with expensive gifts at Spring Festival.

Less than one month later, the 25-year-old is fighting to keep his job.

Since Christmas Eve, the day after Beijing announced strict measures to limit the number of new cars in the capital, Liu has not received even one prospective buyer, let alone signed any contracts.

His showroom in Beijing's Chaoyang district, which sells China-made Chery models, could "encounter its first single-digit monthly sales before Chinese New Year", said the salesman, who started in the industry four years ago.

"We've heard the store will lay off 60 to 70 percent of its sales staff after the holiday," added Liu.

To ease the gridlock, city authorities will now issue just 20,000 new vehicle license plates a month, meaning annual sales will plunge from 891,000 units in 2010 to 240,000 units in 2011.

The unexpected curb on China's largest vehicle market is a major bump in the road for automakers, especially as some 20 other cities with chronic congestion are watching on with keen interest. However, industry experts predict the big players will likely adapt by focusing more on smaller cities further inland.

"The best and most efficient way for automakers to offset the declined sales in Beijing and maybe other first-tier cities in the near future is to rapidly shift their dealer network expansion inland," said Zhong Shi, an independent analyst in Beijing.

By the end of last September, China's total vehicle capacity was 70 million units, lower than the 75 million in Japan and 285 million in the United States, according to the Ministry of Public Security statistics.

However, most of the country's vehicles run on roads in large cities and coastal areas, as 300 second- and third-tier cities of 2 million people or less still have low car capacity.

"There is still huge potential for car consumption in China's small cities, as well as rural markets," added Zhong.