Auto Manufacturers Asked to Rely Less on Subsidies Offered

Auto Manufacturers Asked to Rely Less on Subsidies OfferedCar manufacturers were asked to rely less on government subsidies when they are developing fuel efficient cars. China’s top economic planning agency told the hundreds of auto industry executives that the National Development and Reform Commission and its regulator is searching for ways to improve the subsidy program for smaller fuel efficient vehicles.

As of the moment the country is offering subsidies of 3,000 yuan per purchase of fuel efficient vehicles using 1.6 liter engines or smaller. Also the average consumption of these types of vehicles is limited to 6 liters per one hundred kilometers in order for them to qualify for the subsidy. The government is all support, but as enterprises these car makers should improve this type of technology by themselves rather than relying on government subsidies all the time.

Electric vehicle buyers can get up to 60,000 yuan in subsidies and buyers of gasoline-electric hybrid vehicles can get 35,000 yuan. Last week China came up with a new incentive program for all fuel efficient vehicles including buses to further encourage the  people to use more environmentally friendly vehicles.

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