Chongqing offers subsidies for locally made vehicles

Chongqing municipality will be the first local government to subsidize the purchases of locally produced vehicles, after the State Council resumed incentives last month.

Buyers will receive subsidies equivalent to 6 percent of the vehicle price, or as much as 3,000 yuan ($471) per unit. The subsidies cover purchases of minivans or light- and mini-trucks with engine capacities of 1.6 liters or less that are produced in the city.

The detailed subsidy procedure and policy will be released later, said the government on its website.

Chang'an Automobile Group, one of China's largest vehicle makers, said that it will provide additional subsidies to buyers, in response to the municipal government's stimulus measure.

The Chongqing-based company will allocate up to 5,000 yuan per unit.

The move will also help spur sales for US automaker Ford Motor Co, as it has a three-tie joint venture with Chang’an and Japan's Mazda Motor Corp in Chongqing.

China is expected to launch national stimulus measures including subsidies for automobile purchases in rural regions and vehicle trade-ins, which the government used in 2009 to drive domestic auto sales.

Sources said that the policy will be similar to previous ones, including a subsidy of 10 percent of the unit price, or up to 5,000 yuan per unit, for minivans with engine capacity of 1.3 liters or less purchased by farmers.

In 2009 and 2010, the central government provided 4.97 billion yuan in subsidies to vehicle buyers in rural regions, which drove new vehicle sales of 38.2 billion yuan.