China Rolling Out "Cars to Countryside" Program

Shanghai, February 19, 2009: (Gasgoo.com) Detailed rules on China's "Cars to the Countryside" scheme will be publicized this week, reported the Beijing Times today.

The newspaper said the program has already approved by the Ministry of Finance last Friday and will formally go into operation as of March 1.

Under the scheme, farmers in rural areas who trade up to lightweight vans or purchase minibuses with engines size of 1.3 L or less would get up to 10% subsidies of the full price of a complete vehicle.

In addition, farmers will also be offered a tax cut for every smaller vehicle they purchase. Analysts estimate that farmers will benefit from the tax cut with a saving of about 5,000 yuan ($735) on each minibus.

The government will grant 5 billion yuan in total for the program. Domestic light truck makers including Beiqi Foton Motor Co, Anhui Jianghuai Automobile Co, Dongfeng Motor and major minibus maker such as Chongqing Changan Automobile Co, SAIC-GM-Wuling, and Lifan Motor are expected to be the biggest beneficiary of the scheme.

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