Chinese automobile shares fell sharply on Friday after Beijing authorities Thursday announced stringent new measures to limit the sale of new passenger cars in the national capital to ease traffic congestion.

In Hong Kong, Brilliance China Automotive Holdings Ltd shares plunged 7.52 percent to HK$5.41 and Geely Automobile Holdings Ltd. declined 6.027 percent to HK$3.43, while Dongfeng Motor Group Co. slid 7.88 to HK$13.080.

According to new rule, the Beijing Municipal Government will issue a quota of 240,000 new vehicle license plates through a lottery system next year, which is just one third of the 700,000 new passenger cars registered during the current year.

Among the 240,000 new vehicle license 88 percent will be allocated for the individual buyers, 2 percent for commercial use and 10 percent for both government and corporate use. The new policy will take effect on January 1, 2011.

The latest rule change would have negative effect on Chinese auto industry which is the fastest growing in the world. The latest rules also including a rush-hour ban on vehicles registered outside Beijing and city-centre parking restrictions.

Last year, China overtook United States as world’s largest auto market. On annual basis, Chinese auto sales rose 46 percent to 13.65 million vehicles and production climbed 48 per cent to 13.79 million units.