China rolls out new incentives to boost auto market

A worker is working on the installation in an electric vehicle production line in RuGao, Nantong, Jiangsu Province, China

China is making a series of new incentives to stimulate the domestic auto market. Auto sales account for over a quarter of China’s total sales of consumer goods above designated size, playing a vital role in promoting consumption and enhancing the domestic market for China.

Recently, 10 government departments of China jointly issued a 24-item scheme to further stimulate consumption growth, and the first six items found in the scheme were tailored for the auto market. They include acceleration of auto replacement and the optimization of subsidy structures for new energy vehicles. Besides, multiple policies have been rolled out to stimulate new and used car markets. This year, new models of auto-selling will be tested to improve sales and consumer experience, and the limits on inflows of second-hand vehicles from other regions will be further lifted to prosper the used car market.

“These incentives will not only drive auto sales but also combine the upgrading of both the auto industry and household consumption, which could further optimize the supply and demand matching of auto consumption,” said Liu Yunan, an inspector for the Comprehensive Department of the National Development and Reform Commission (NDRC). Zheng Shuwei, director of the Department of Market System Development at the Ministry of Commerce introduced that this year the ministry would focus on the entire auto industry industrial chain and promote high-quality development of the auto market to stabilize auto consumption and foster a strong domestic market.

Local governments in Beijing, Shanghai, Zhejiang, Hunan, Henan, Liaoning and Shandong are also building world-class industrial clusters now, centered with new-energy vehicles to create international hubs of auto manufacturing, development and auto parts. At the same time, Chinese automakers and relevant enterprises have mapped out new policies to better cater to the new demands of the Chinese market. BAIC Group, Changan Automobile, FAW-Volkswagen, and Bestune have all announced that they will offer subsidies for a portion of their products. Insiders believe that these measures will largely promote auto consumption and replacement, especially in third- and fourth-tier markets as well as the countryside.

(People’s Daily)