Policy Rumored to Boost Vehicle Sales in Rural China

Automotive Author: Xiangqun Ji Editor: Tao Ni May 18, 2022 11:02 PM (GMT+8)

The policy, if it turns out to be true, will not only improve the car sales in China, but also benefit the whole industry.

Cars, traffic flow

According to media reports, policies will be released as early as June to encourage automobiles to be sold to China’s rural markets, so as to rev up the sagging sales of both petrol and new energy vehicles (NEVs). 

China Securities News originally reported that discounts will be offered for vehicles priced at under CNY 150,000 (USD 22,222), and the range of discount is around CNY 3,000-5,000 (USD 445-740) per vehicle.

Moreover, the new policy is expected to boost sales of NEVs by 300,000-500,000 units, and that of petrol cars by 200,000-300,000 units.

Given its sheer scale, the sales drive, if implemented, will push up the amount of discounts to over CNY 1.5 billion and as much as CNY 4 billion. 

However, speaking to the National Business Daily, an official with the China Association of Automobile Manufacturers (CAAM) dismissed the proposed policy as "fake news." 

The so-called “Automobiles Go to Countryside” scheme was first launched in 2009 as part of a stimulus package China rolled out to stimulate domestic demand. The scheme subsidized rural residents  in buying vehicles with a displacement of 1.3L or less. Thanks to the policy, compact car sales increased by 1 million units during 2009.

Due to the severe impact of COVID-19 on China’s economy, vehicle manufacturers are  reeling from the pressures of falling sales in the domestic market.

China’s new vehicle delivery plunged by 47.6% to 1.181 million units in April 2022 from 2.252 million units in the same month last year, according to China Passenger Car Association。