Subsidies for auto replacements officially released

Consumers who sell their cars in order to purchase new ones will get rebates from 3,000 yuan to 6,000 yuan, the Beijing News reported.

China officially confirmed the new subsidy program to help consumers replace automobiles on Tuesday after seeking public opinion on the plan since last month. The program was designed by the Ministry of Finance along with the cooperation of ten other ministries, including the Ministry of Commerce and the National Development and Reform Commission.

Under the program, consumers who trade in their used mid- and small-sized trucks and some types of mid-sized passenger cars for new ones will receive a subsidy.

Subsidies will also be given to consumers who sell automobiles that no longer meet the government's new emission standards but are still within life expectancy.

The subsidy will be no more than the purchase tax of the automobile.

Consumers can bring old vehicles to a reclaim station in a year through May 31, 2010 and can apply for subsidies between August 10, 2009 and June 30, 2010. Rebates will be paid within 15 working days after consumers provide a confirmation note from the recycling plant and take receipts for their new automobile to the local government.

The new subsidy program for auto and home appliance upgrades will directly spur domestic consumption, said Chinese Commerce Minister Chen Deming on Tuesday.

It's estimated that the replacement plan will result in the disposal of 2.7 million vehicles and the recycling of 90 million home appliances as well as 500 billion yuan in consumer spending this year.

The program will also help to curb pollution, said Chen.

According to officials from the Ministries of Finance and Commerce, the government will increase subsidies for auto replacements from 1 billion yuan to 5 billion yuan this year.

Auto dealers support the subsidy program and many auto manufacturers have even offered rebates to attract consumers since the program was first put up for public discussion.

After the official release of the program, manufacturers will likely offer up a wider range of models for replacement, said Xiong Wei, a manager from Beijing Hyundai Motor Company Corporation.

On the other hand, some auto owners were less enthusiastic about the program. A villager surnamed Liu in a suburb of Beijing said the subsidies were too low to attract many consumers.