Local governments step up with incentives to spur sales

Measures include subsidies for buyers and cutbacks on license plate restrictions

Local authorities in a growing number of Chinese cities are offering subsidies and increasing the number of available license plates to encourage vehicle purchases in the country.

Residents in Ningbo, a city in East China's Zhejiang province, can have a discount of 5,000 yuan if they buy a locally produced vehicle by Sept 30, the city government said on Friday.

Two days earlier, the Hangzhou government in the same province decided to offer another 20,000 license plates this year. Hangzhou is one of several metropolises in the country that limits the number of license plates.

By Friday, at least eight cities in Zhejiang, Guangdong, Hunan and Jiangxi provinces had released measures, which are primarily centered on offering financial incentives. The Beijing government is reportedly considering moves as well.

"Cities including Hangzhou have relaxed the limits, and the moves will help boost vehicle sales," said Xian Guoyi, a senior official at the Ministry of Commerce.

Xian made his remarks during a press conference on Thursday. He said the ministry will encourage more local governments to come up with measures considering actual conditions.

"Cars are one of the most important pillars of the economy," said Xian.

The ministry, together with China's top economic planner and other departments, has issued repeated calls for local authorities to help salvage the auto industry, which was hammered during the epidemic.

In February, carmakers delivered 310,000 vehicles, down almost 80 percent year-on-year, according to the China Association of Automobile Manufacturers.

In the first two months of 2020, vehicle sales totaled 2.24 million in the country, down 42 percent year-on-year.

To make it worse, vehicle sales in China fell for two years in 2018 and 2019 before plummeting in the first two months of this year.

But as the epidemic is basically curbed in China, visitors are returning to car showrooms and sales are showing signs of recovery. By March 24, over 90 percent of dealerships had resumed operations, according to the All-China Federation of Industry and Commerce.