China’s Commerce Ministry says a car-purchasing tax cut and old-for-new trade-in subsidies are generating strong results.
The government’s Xinhua news service quotes a ministry statement as saying car buyers are actively responding to the new policy, which took effect Jan. 1, as both the average daily number of subsidy applications and subsidy handouts have more than doubled from before the new program was introduced.
The ministry says as of Feb. 12, more than 23,000 new vehicles had been sold, worth more than RMB3.3 billion ($483.1 million), in which buyers used the two incentives.
The purchasing tax rate on vehicles with engine sizes of 1.6L or smaller is now set at 7.5%, up from 5% last year but still below the 10% imposed previously.
China also is giving higher subsidies to vehicle owners who swap old vehicles for new cars. As of Jan.1, this ranges from RMB5,000 to RMB18,000 ($732 to $2,635) based on the model of vehicle, up from RMB3,000-RMB6,000 ($439-$878).
The government also now allows car buyers to use both incentives. Last year, they had to pick one or the other.