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The holding strategy performs well in resisting bus bunching in the dedicated bus route. Yet, its efficiency in a non-dedicated bus route has not been well studied, and its external effects on other road participants are unclear. We study this topic in a circular two-lane traffic system consisting of buses and cars. A cellular automaton model is used to depict the vehicles' dynamic behaviors. By numerical simulations, we obtained the phase diagram of the bus system, and identified the four states concerning the stability and level of service. Then we analyzed the flow and velocity characteristics and distinguished three states of the traffic system. Our simulations prove the separation effect of car flows on the bus headway regulation. Combined with this effect, the holding strategy makes the bus running more homogeneous and the bus utilization more evenly in the mixed traffic flow condition. Interestingly, from a macro perspective, the holding strategy incurs no detrimental effects on the whole traffic system, though it might intensify local interference between buses and cars near bus stops. Under certain conditions, the average speed of buses and cars increases, eventually increasing the system's capacity. • Interference between buses and cars in mixed traffic flow conditions is analyzed. • Bus operating states with and without the holding are investigated. • The bus line characters and traffic conditions determine the holding effeteness. • External effects of the bus holdings on the car flows are discussed. [ABSTRACT FROM AUTHOR]