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China releases new subsidizing policy for scrapping old vehicles

In mid-July this year, a number of 10 government departments headed by the Ministry of Finance and the Ministry of Commerce jointly issued the “Measures for the Implementation of Trade-in Old Vehicles for New Ones” (the Measures) with specific provisions concerning subsidies, scope of coverage, application, examination and supervision.

According to the Measures, vehicles that get scrapped during the time period between June 1, 2009 and May 31, 2010 could enjoy government subsidies ranging from ¥3,000 ($441) to ¥6,000 based on four different vehicle types: old mini trucks and old medium-sized taxi buses under eight years; old medium and light trucks under 12 years; old medium buses under 12 years; and yellow-tagged or high-pollutant vehicles that are to be scrapped ahead of life span and trade-in for new ones.  

“China is expected to have a total of 2.7 million vehicles and 90 million household electronic appliances scrapped this year,” said Chen Deming, Minister of Commerce. “If this could be done, it could drive up domestic demand of consumption by as much as over ¥500 billion nationwide.”

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