"Autos to the Countryside" Subsidy Program Started in March

It is hoped “Autos to the Countryside,” part of the Revival Plan for the Auto Industry, will raise auto consumption by 1 million vehicles.

    China's "Autos to the Countryside" subsidy program started in March. The Revival Plan for the Auto Industry stipulates that from March 1 to December 31, 2009, the government will earmark RMB 5 billion for lump-sum subsidies to farmers who replace their three-wheel vehicles and low-speed trucks with lightweight trucks or minibuses with a displacement of less than 1.3 liters. That means for every fuel-efficient vehicle purchased by farmers, the government will provide a subsidy covering more than 10 percent of the vehicle's cost. When combined with an earlier stimulus measure that cut purchase tax by half for vehicles with an engine capacity of less than 1.3 liters, the new subsidy provides considerable incentive for farmers to purchase new vehicles. The program will raise automobile consumption by at least 1 million vehicles during 2009, according to industry analysts.