Shanghai moves to rev up auto consumption

Shanghai has released a series of new policies to stimulate consumer demand for automobiles and boost the economy.

The city will increase the supply of licence plates, which means adding 40,000 plates for non-commercial passenger cars starting from the end of March to the end of this year, the Shanghai Development and Reform Commission announced during a press conference on Thursday afternoon.

Shanghai's quota of car plates in March and April has been increased compared with the previous months, with 11,970 in March and 13,500 in April. In January and February, Shanghai's quota of car plates is 8,612 and 7,966.

Qiu Wenjin, deputy director of the commission, said that automobile consumption is a major focus among consumers and plays an important role in the country's economic and social development.  

Qiu added that amid the COVID-19 pandemic this year, auto consumption has faced downward pressure. However, the market still has potential for further growth based on the long-term macroeconomic environment and consumer demand for smart and green cars.

The government also said it will give subsidies to consumers when buying gasoline and new-energy vehicles.

Subsidies are given toward new gasoline vehicles for replacement of old cars. Shanghai consumer who scrap or transfer out of their national IV and below emission standard vehicles and buy new ones which meet national VI emission standards can be given a subsidy of 4,000 yuan (US$565) per vehicle.

In addition, the commission said it encourages auto companies in Shanghai to give consumers discounts to further amplify the effect of government subsidies.

For new-energy vehicles, consumers who purchase green cars can enjoy central government subsidies and purchase-tax reductions as well as other benefits. Shanghai will give consumers another 5,000 yuan in subsidies for charging costs incurred during the use of new-energy vehicles.

Other policies cover further expanding the application of new-energy vehicles, improving the infrastructure for charging and battery replacement as well as promoting the sale of smart vehicles.

The commission will work with relevant departments to craft details on relevant policies. It will release a number of measures and related supporting rules on the city's automobile consumption as soon as possible.

Hua Yuan, director of the Shanghai Commission of Commerce, said that the city will launch a number of activities to boost car consumption, including hosting auto "carnivals" covering more than 800 4S stores in the city.

A number of new car launches and preferential promotions will be arranged according to the plan. Car dealers in Shanghai will also carry out activities to provide discounts to consumers.

China’s biggest automaker SAIC Motor will host activities and provide discounts on its eight brands and more than 10 new vehicles.