China will encourage consumption by rural residents of cars priced at less than 150,000 yuan ($22,230), including ICE vehicles and NEVs, according to local media.
(Image credit: CnEVPost)
China is expected to introduce new policies in early June to boost car consumption in rural areas, the official China Securities Journal reported Tuesday, citing several industry sources, confirming a report last week, albeit at a slightly different timeframe.
The country's goal is to encourage the consumption of cars priced at less than 150,000 yuan ($22,230) in rural areas, including internal combustion engine (ICE) vehicles as well as new energy vehicles (NEVs), according to the report.
The stimulus will be car purchase subsidies that could be RMB 3,000-5,000 per vehicle, the report said, adding that some experts expect this to result in an additional 200,000-300,000 sales of ICE vehicles and an additional 300,000-500,000 sales of NEVs.
On May 13, a report by Cailian said that a new round of Chinese policies to boost auto consumption in rural areas will be released soon, possibly as soon as this month.
China is closely studying a number of policies, and it is uncertain which one will be released, the report said, citing an insider at the China Association of Automobile Manufacturers.
In February, a plan issued by China's State Council mentioned that China would implement a new round of measures to promote cars in the rural market and boost the renewal of durable consumer goods by rural residents.
China will also improve the construction of charging and battery swap infrastructure in counties and central towns, according to the plan.
With the latest round of Covid outbreaks hitting the economy, the auto sector is one of the hardest hit.
China's passenger car retail sales in April were 1.042 million units, down 35.5 percent from a year earlier and 34 percent from March, according to data released by the China Passenger Car Association (CPCA) on May 10.
From January to April, retail sales of passenger cars in China were 5.957 million units, down 11.9 percent, or 800,000 units, from a year earlier. Sales in April were down 570,000 units from a year earlier.
For the month of May, the CPCA said the auto market continues to face serious challenges in terms of supply and demand due to external factors such as the Covid epidemic.