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

When Chevrolet came out with the 2018 Equinox last September, the facelifted model was offered in a diesel option for the first time, plus it weighed much less at 400...
by - July 23, 2017
If you are a huge fan of the hardcore GTS version, you probably know that the closest you could get to that model is the upgraded model of the M4...
by - July 23, 2017
Audi’s intention to bring out the Renn Sport Racing version of the Q5 was made clear when it unveiled the Audi SQ5 at the 2017 Detroit Motor Show early this...
by - July 22, 2017
Kia’s Sorento midsize sports utility vehicle is reaching its mid-cycle for the 2018 model year. Thus, its fans, enthusiasts and satisfied customers are expecting the Sorento to receive an update...
by - July 22, 2017
The Lotus Evora Sport 410 astonished the world after arriving as the more powerful and lighter edition of the already impressive Evora 400. Now, Lotus Cars is throwing in another...
by - July 22, 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