China considers extending tax cuts to boost automobile sales

• Source: Global Times
• [11:18 November 06 2009]
• Comments

Zhu Hongren, spokesman for Ministry of Industry and Information Technology.

The Chinese government may consider extending tax cuts to boost automobile sales in more of the rural areas, said Zhu Hongren, spokesman for the Ministry of Industry and Information Technology.

The possible extension is due to the strong results of high domestic demand and the restructuring of the auto industry.

According to an Oct. 21 report, the subsidy for replacing old vehicles will be a maximum of 12,000 yuan, and the new program will be implemented before the end of this year.

The program launched in July says that 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.

Consumers who sell vehicles that no longer meet the government's new emission standards but are still within their life expectancy will also receive subsidies. Those consumers with vehicles that don't meet the new emission standards can bring the old vehicles to a reclaim station until May 31, 2010 and can apply for subsidies until June 30, 2010. Rebates will be paid within 15 working days, after consumers provide a confirmation note from the recycling plant and show receipts for their new vehicles to the local government.

Earlier this year on January 14, China released the stimulus plan for the auto industry, lowering the automobile acquisition tax to 5 percent on those cars with engines that were below 1.6 liters. The plan also said China will invest 5 billion yuan to hand out subsidies for vehicles such as three-wheeled motor ones, light duty trucks, and mini buses, with engines of 1.3 liters or lower.

Agencies and Wang Yang contributed to this story