China adds models to green auto subsidy list

China has added 61 vehicle models to the cars eligible for green car subsidies.

The National Development and Reform Commission (NDRC), the Ministry of Industry and Information Technology (MIIT) and the Ministry of Finance jointly announced the second batch of energy-efficient cars covered in its promotion catalog on Aug. 18, which included Beijing Benz, Beijing Hyundai, Shanghai GM, FAW Volkswagen, Changhe, Chery and other six enterprises.

The 61 models in the catalog are petrol or diesel-powered passenger vehicles, including hybrid and dual-fuel vehicles, with engines of 1.6 liters or less and fuel consumption 20 percent lower than the current standard.

Buyers of these models will get a subsidy of 3,000 yuan, or 443.37 U.S. dollars, per unit.

Chery was the big winner with a total of 17 models on the list. It is followed by FAW-Volkswagen, which has nine models, and there were five models from Shanghai GM.

Foreign auto brands still dominate this energy-saving cars catalog, and even the new luxury Mercedes-Benz C180 appears on it. There were 26 domestic models accounting for 42.6 percent of the list. This rate is even lower in the first catalog when domestic brands were less than 20 percent.

The government halved the purchase tax levied on small vehicles to 5 percent in 2009. Boosted by the policy, small vehicles accounted for 70 percent of vehicles sales growth in 2009.

However, when the tax was lifted to 7.5 percent for small vehicles starting in last December, sales growth momentum of small vehicles began to fade. The ratio of small vehicles compared to overall passenger vehicles dropped below last year's average for a fifth straight month starting in March.

China plans to spend at least 12 billion yuan, or 1.76 billion U.S. dollars, to subsidize small and fuel-efficient vehicles by 2012, covering 4 million vehicles.

By Huang Beibei, People's Daily Online