Local car brands to figure more in new subsidy list

• Source: Global Times
• [10:51 July 08 2010]
• Comments

An electric car made by Chery on display at the 2009 Shanghai Auto Exhibition in Shanghai. Photo: IC

By Zhou Mi

A second list of fuel-efficient vehicles that are eligible for government subsidy is set to be released later this month, and is expected to include more Chinese brands than the previous list, according to a spokesman from a domestic automaker.

Jin Gebo of Chery Automobile, based in Anhui Province, said Chery will have more than 30 of its models on the list, 21st Century Business Herald reported Wednesday.

Only three Chery models were on the first list, which was issued on June 30, while Chinese joint ventures with foreign companies, including Shanghai General Motors and Shanghai Volkswagen, which accounted for two thirds of the 71 models on the list, with 45 models between them.

According to Jin, cars on the second list will all have engine capacities of 1.6 liters or smaller, as was the case for the first list. The subsidy offered to purchasers of the cars listed will also be the same as for the cars on the first list, at 3,000 yuan ($442.5).

So far, there has been no official announcement by the authorities regarding the second list's release or content.

The first list's lack of domestic brands shows that they still have some work to do, accord-ing to Li Shengmao, an analyst specializing in the new energy industry from China Investment Consulting, a Shenzhen-based company.

"Most of China's own auto brands have a long history of developing small engine automobiles, but they fail to keep pace with the updated energy-saving technology of the joint ventures," said Li. "A small engine alone does not mean less fuel consumption."

Li also predicted that the majority of models on the second list will still be from joint venture brands such as Beijing Hyundai, the South Korean automaker's local joint venture, and Shanghai General Motors.

Shanghai General Motors previously said it is going to make 75 percent of its vehicles with small engines of less than 1.6 liters.

The government's subsidy campaign could boost small-engine vehicle sales in China by more than 4 million units by 2012, reducing oil consumption by 750 million liters and carbon dioxide emissions by 3.3 million tons, according to an official statement released on June 30.