Source: CCTV.com

02-23-2009 17:14

Special Report:   Global Financial Crisis

Subsidies are to be given out to farmers who purchase autos in the countryside. The move is aimed at spurring consumption in the auto sector.

Figures show the output of some compact car producers like  Chang'an and Hafei have been growing in January.

According to the policy, the State Council will allocate a fund of 5 billion yuan to people who buy qualified cars. Qualified cars count as those which have emissions lower that 1.3 litres, are rejected three wheeled cars, or are light vans. The policy will take effect on March 1st and continue to the end of this year.

At a car factory in Shanghai General Motor, the assembly lines are very busy. They've received a lot of orders after the stimulus plan was issued.

Shen Yang, GM of SGMW, says, "once our products are finished on the production line they should get to the market as quickly as possible. Clients have signed orders and are waiting for the goods. We sold 90,000 cars in January, up 40 percent year-on-year. It's quite clear that the stimulus plans have had a good effect on our business. We are confident about our business now."

Statistics show about 980,000 units of compact cars under 1.3 litre of emissions were sold in 2008. This is an increase of 5.4 percent year-on-year. The new policy will no doubt inject even more energy into the compact car market.

Shen Yang says, "auto sales in the countryside will help accelerate farmers' purchasing power. The implementation of this policy will play a great role in helping some farmers go home to do business."

Figures show the output of some compact car producers like Chang'an and Hafei have been growing in January. Experts predict that the new subsidy policy will spur the compact car sales volume to reach over 100,000 units. This would mean a ten percent of growth rate in 2009.

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Editor:Qin Yongjing