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:

Comments

Recommended

Are you a big fan of legendary boxer Mike Tyson, the former heavyweight world champion? Or are you a big fan of the iconic Ferrari F50? Either way, you will...
by - February 24, 2017
It seems that AM-RB 001 hypercar is not the only vehicle project that Aston Martin and Red Bull Racing has gone into. This time, don’t expect something as outlandish as...
by - February 24, 2017
The year 2018 marks the golden anniversary of Subaru of America. Of course, the company will celebrate 50 years of being at the helm of the brand’s crusade in North...
by - February 24, 2017
During car crashes and accidents, there are times that its occupants can’t get out easily. There are times when the only way to get out of that situation is to...
by - February 23, 2017
Could this be a special version of Ferrari’s much acclaimed LaFerrari? No matter how we look at it, the patent images for this sports car from Ferrari indicate its striking...
by - February 23, 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