China continues sales incentive for fuel-efficient cars
China will extend subsidies to buyers of fuel-efficient cars in 2011 but will no longer provide hand-outs to farmers who trade in fuel-guzzling models for new ones, the finance ministry said on last Friday.
The government will continue to promote fuel-saving and green vehicles through financial subsidies, the ministry said in a statement on its Web site.
Mini-vehicle makers such as Chongqing Changan Automobile Co. and SAIC-GM-Wuling Automobile Co. will be affected by the latest policy shift because minivans and pickups are popular in rural areas, industry observers said.
But automakers will continue to benefit from Beijing's handouts for fuel-saving models, they added.
SAIC-GM-Wuling is a three-way joint venture of SAIC Motor Corp., General Motors Co. and Liuzhou Wuling Motors Co. in southern China.
The ministry has ended tax incentives for small cars in 2011, a long-expected move that would slow the expansion of the world's largest auto market.
