SHANGHAI, Mar. 25 (SMM) -- In order to optimize vehicle replacement program, and improve attraction of the program, the Ministry of Finance and the Ministry Commerce announced to improve subsidies for vehicle replacement program in accordance with decision made on an executive meeting of the State Council. According to the latest adjustment, vehicle purchasers who enjoy the subsidy for replacing their old vehicles are also eligible for a reduced tax for the automobile purchase. The new vehicle stimulus program has generated positive market response, and the number of people for enquiries and subsidy applications has experienced significant increases.
According to official data, the number of subsidy applications has increased 50% since January 2010. The daily average applications were 2 times as more as those before the new adjustment, and the amount of subsidies increased more than 1 times, stimulating new vehicle consumption growth of 52%. Applications for medium-size buses, cars, large-size buses, and heavy trucks, which all have greater positive impact from the new stimulus program, showed more evident growth, up 148%, 139%, 129% and 97% respectively. As of now, the amount of subsidized vehicles is 23,000, generating new automobile consumption by about RMB 3.3 billion.
There is no doubt that the Central Government's vehicle incentive policy has greatly stimulated domestic automobile consumption, and the positive impact is continuing well into 2010. The subsidy program for new energy vehicles had been put on the agenda during China's two parliamentary meetings in March. In this context, SMM believes production and sales in Chinese automobile industry will represent stronger performance in 2010, and this will serve as a major driving force for lead-acid battery consumption.
(Edited by SMM)