End of rebates in China may boost GM sales

Article by Christian A., on December 20, 2010

The Chinese government will end the rebate on car purchases by Dec. 31 – a move that is expected to benefit overseas automakers including GM, Ford Motor Co. and Nissan Motor Co., according to Bill Russo, a Beijing-based senior adviser at Booz & Co.

This subsidy, which reduces the tax from 10% of the purchase price to 7.5%, covers cars with engines of 1.6 liters or smaller, a segment dominated by Chinese models. Many consumers are now waiting for 2011 to buy a vehicle instead of beating the Dec. 31 deadline for the consumption-tax rebate.

One model that is expected to be popular is the upcoming Baojun 630 sedan from SAIC-GM-Wuling Automotive Co. The China Association of Automobile Manufacturers said that local brands made up about 63% of the new models with that size engine last year.

Russo explained that incentives are being used to keep customers as well as to appeal to first-time buyers. He believes that as subsidies are phased out, it will pose as more of a challenge for local companies than for foreign carmakers.

“The game that has been played with incentives is to try to keep consumers, especially first-time consumers, interested in purchasing those locally branded cars,” Russo said. “To phase out the subsidies is more challenging for local companies than for foreign ones.” [via autonews - sub. required]

Topics: china, gm, sales

If you liked the article, share on:

Pin It

Comments

Recommended

It’s quite safe to say that this generation marks the rise of the electric cars. For the past few years, automakers have been very busy trying to find the perfect...
by - March 28, 2017
Want to go for a sportier look, but don’t have enough cash to burn? Good news for future Ford Edge buyers, as the 2018 model year will have an optional...
by - March 28, 2017
Audi refreshes its portfolio as its go-faster division officially announces the release of six new RS models by the end of 2018. That’s quite a huge number of cars to...
by - March 28, 2017
Has Toyota started the production of a new electric supercharger? Well, a patent that was recently published indicated that they might have. And this electric supercharger looks more durable and...
by - March 27, 2017
The Tesla Model S has finally arrived in South Korean soil and is now available for test drive. But, there’s a catch. You’ll have to wait several months if you...
by - March 27, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries