Multiple provinces in China are reining in vehicle trade-in subsidies, dealing a blow to auto sales and casting doubt on the durability of the national stimulus program.
On Sept. 4, the Department of Commerce in Hubei province said it was cutting auto trade-in incentives to two levels — 3,000 yuan ($411) and 5,000 yuan — from a previous range of 7,000 to 15,000 yuan. The application process has also become more complex. Starting Sept. 5, buyers must obtain an eligibility voucher before purchasing a new car. The provincial platform releases a limited number of vouchers daily, with volume adjusted according to fund usage. The tighter policy has led some sales staff to suggest buyers seek subsidies in neighboring provinces instead.
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