End of rebates in China may boost GM sales

Article by Christian Andrei, 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:

Comments

Login or Create new account to add a comment!

Recommended

When Donkervoort Automobielen BV unveiled its Donkervoort D8 GTO-RS limited edition in May 2016, customer interest has been so overwhelming that the Lelystad, Netherlands-based carmaker sold out this one-of-a-kind vehicle...
by - December 8, 2016
Mazda’s RX-7 and RX-8 rotary sports car are two of the most beloved sports cars from Japan. Aside from their terrific road balance and agility, these sports cars are powered...
by - December 8, 2016
Nearly a decade after Opel and sister brand Vauxhall introduced the Insignia large family car, these companies are now getting ready to unveil the second generation of this offering from...
by - December 7, 2016
After we caught a glimpse of the revamped Amarok, VW Australia once again wants to give its ute a sinister look inspired by the Mad Max movie franchise. The “Korama”...
by - December 7, 2016
Customers in the European market are known for leaning towards style and with this in mind, Nissan has revealed the special LEAF Black Edition. While the production run of this...
by - December 7, 2016
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