China Is Offering Drivers Who Exchange Their Old Car For A New Model ₹ 1.15 Lakh

Beijing: The commerce ministry has stated that drivers in China who trade in their old vehicle for a newer model may get a subsidy of up to 10,000 yuan ($1,380 or ₹ 1,15,096).
With over 100 domestic automakers striving to create the future clean car, China is both the largest and most competitive market for automobiles worldwide.

However, a downturn in the economy has hurt consumer purchasing and fueled a battle of prices among manufacturers, which has hurt their bottom line.

Beijing is providing the discount to drivers who trade in gasoline-powered cars that don’t satisfy certain national pollution regulations or electric or hybrid vehicles registered before 2018 in an effort to increase demand.

A 7,000 yuan ($960) subsidy is available to those who replace a car bought after 2018, the Commerce Ministry stated in a statement on Friday.

The law, which is in effect until the end of the year, is applicable to all new electric and hybrid car purchases.

The announcement is timed to coincide with the China Auto Show, where Chinese automakers are outshining international competitors who are finding it difficult to switch to electric cars.

The choice was made at a time when several Western nations are placing more scrutiny on Chinese manufacturers.

Under pressure from France, which hosts a number of venerable automakers, the European Commission has opened an inquiry into Chinese government subsidies for the electric vehicle industry and has threatened to impose customs levies in order to safeguard the European market.

In general, the US opposes subsidies if it believes that they would cause “overcapacity” in production and hurt international competitiveness.

China’s autos may constitute a threat to national security, which worries Washington as well.