China will extend subsidies to buyers of fuel-efficient cars next year but will no longer provide hand-outs to farmers who trade in fuel-guzzling models for new ones, the finance ministry said on Friday. The government would continue to promote fuel-saving and green vehicles through financial subsidies, the ministry said in a statement on its website.
Major mini-vehicle makers, such as Chongqing Changan Automobile Co Ltd and GM-SAIC-Wuling, would be affected by the latest policy shift as mini-vans and pickup trucks are popular in rural areas, industry observers said. However, many domestic and foreign players, including GM, Changan and Ford Motor Co, would continue to benefit from Beijing's handouts for fuel-saving models, they added.
GM-SAIC-Wuling is General Motors Co's three-way tie-up with SAIC Motor Corp Ltd and Wuling Auto in southern China. The ministry said earlier this week that it would end tax incentives for small cars next year, a long-expected move that would apply the brakes to rapid expansion of the world's largest auto market.
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