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Support for car scheme increases
Source: Xinhua |
September 15, 2010, Wednesday
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Print Edition
Print Edition
CHINA'S old-for-new car scheme is gaining momentum after the authorities raised the subsidy levels at the start of this year, the Ministry of Commerce said yesterday.
In the first eight months of this year, a total of 210,000 vehicles were sold under the program, a surge of 690 percent from last year, the ministry said in a statement on its website.
The figures have fueled speculation the trade-in scheme could be extended and the subsidies raised as the government seeks to improve energy efficiency.
Experts attributed the surge to the government's move in January to raise the original subsidy levels ranging from 3,000 yuan (US$445) to 6,000 yuan to the current band of 5,000 to 18,000 yuan.
The higher subsidy had proved effective as it boosted consumer spending of 25.3 billion yuan on new cars by granting subsidies of 2.95 billion yuan from January to August, the statement said.
In August, the government issued 340 million yuan in subsidies to program participants who traded in their old cars and bought 24,000 new ones, up 82 percent from July, the ministry said.
The scheme was rolled out by the commerce ministry and the Ministry of Finance in June last year as part of efforts to stimulate domestic consumption amid the global downturn and to eliminate energy-wasting vehicles.
The program initially got a lukewarm reception from consumers who could generally sell their old cars for more than the value of the government trade-in program, said Luo Lei, deputy secretary general of the China Automobile Dealers Association.
In the six months after the scheme began, only 12,000 cars were sold with 100 million yuan in subsidies generating new spending of 1.8 billion yuan.
Even as it gained pace, the trade-in scheme fell far short of reaching the pre-set goal of cutting a million old cars with subsidies of 5 billion yuan, Luo said.
In June, the authorities extended the replacement program from May 31 to December 31 in a move to accelerate the elimination of high-emission and fuel-guzzling vehicles and boost domestic consumption.
As the trade-in program becomes more effective, experts expect the authorities to extend the scheme or launch similar ones when it expires at the end of this year.
In the first eight months of this year, a total of 210,000 vehicles were sold under the program, a surge of 690 percent from last year, the ministry said in a statement on its website.
The figures have fueled speculation the trade-in scheme could be extended and the subsidies raised as the government seeks to improve energy efficiency.
Experts attributed the surge to the government's move in January to raise the original subsidy levels ranging from 3,000 yuan (US$445) to 6,000 yuan to the current band of 5,000 to 18,000 yuan.
The higher subsidy had proved effective as it boosted consumer spending of 25.3 billion yuan on new cars by granting subsidies of 2.95 billion yuan from January to August, the statement said.
In August, the government issued 340 million yuan in subsidies to program participants who traded in their old cars and bought 24,000 new ones, up 82 percent from July, the ministry said.
The scheme was rolled out by the commerce ministry and the Ministry of Finance in June last year as part of efforts to stimulate domestic consumption amid the global downturn and to eliminate energy-wasting vehicles.
The program initially got a lukewarm reception from consumers who could generally sell their old cars for more than the value of the government trade-in program, said Luo Lei, deputy secretary general of the China Automobile Dealers Association.
In the six months after the scheme began, only 12,000 cars were sold with 100 million yuan in subsidies generating new spending of 1.8 billion yuan.
Even as it gained pace, the trade-in scheme fell far short of reaching the pre-set goal of cutting a million old cars with subsidies of 5 billion yuan, Luo said.
In June, the authorities extended the replacement program from May 31 to December 31 in a move to accelerate the elimination of high-emission and fuel-guzzling vehicles and boost domestic consumption.
As the trade-in program becomes more effective, experts expect the authorities to extend the scheme or launch similar ones when it expires at the end of this year.
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