As more Chinese cities propose license-plate lotteries and other ways of limiting the number of cars on the road, consumers are responding by buying more expensive automobiles with bigger engines.

In Shanghai, one of four major Chinese cities with policies designed to reduce car purchases to ease pollution and traffic congestion, between 9,000 and 10,000 plates are auctioned monthly, fetching an average of 82,000 yuan ($13,400) so far this year.

That steep fee helped convince David Fu, a 26-year-old bank corporate finance manager, to buy an Audi NSU.XE +0.16% A4 in June for 300,000 yuan after looking at a dozen lower-cost models including those made by Volkswagen AG VOW3.XE -0.77% and China's home grown car makers.

'Putting the pricey plate on a more expensive car makes sense,' said Mr. Fu. As scarcer plates raise the cost of owning a car, shoppers can rationalize paying more for their car and believe the restrictions may limit them from trading up later, say auto dealers and analysts.

In addition to Shanghai, Beijing, Guangzhou and Guiyang now have policies aimed at reducing car purchases and as many as eight other cities are likely to follow, say industry executives. The result is first-time car buyers are skipping less expensive models, usually Chinese brands.

'More and more first-time buyers are buying big cars such as sport-utility vehicles and premium cars,' said Yan Jinghui, vice president of Beijing Asian Games Village Automobile Market, a car retail space in Beijing's northern suburb that is home to around 200 car dealerships.

Data from the semiofficial China Association of Automobile Manufacturers shows in Beijing the average price per car has surged 88% since 2011 and the market share of cars with an engine size of larger than 1.6 liters has grown 17% over the same period.

CAAM has estimated the likely car-purchase restrictive policies in the eight cities could slash nationwide car sales by 400,000 units a year at least, or 2% of the total sales of 2012.

Shijiazhuang, one of China's most polluted cities, has proposed limiting the number of new vehicle licenses to 100,000 a year from 2013, equivalent to about 60% of added vehicles in the city in 2011, according to estimates by brokerage house CLSA.

Authorities in the eastern city of Hangzhou in June proposed imposing high license-plate fees on households planning to buy second cars, adding they were prepared to allow the license-plate fee to surpass car prices. Hangzhou has more than one million cars on its roads of the major districts, or one car for every three citizens, according to official sources.

Foreign car makers shrug off these moves. Martin Kuehl, a spokesman for Audi AG, said the restrictions are encouraging trade-ups. 'Would you want to put a 100,000 yuan plate on a 50,000 yuan car?' he asked. Bob Socia, China president at General Motors Co., GM -1.33% said even if all 25 cities with severe congestion were to implement restrictions in 2015, the hit to the company's car sales would be just between 2% and 3%.

In contrast, Chinese auto makers are concerned that license-plate auctions would severelyimpact their sales. A Shanghai-like auction in Hangzhou would lift plate prices to the level of neighboring Shanghai