Auto consumption may double on "cash for clunkers"

Shanghai, June 21 (Gasgoo.com) China's new vehicle consumption has achieved 15 billion yuan ($2.2 billion) since the "cash for clunkers " program started on June 1, 2009. After China's Ministry of Commerce (MOC) recently extended the program to December 31, the figure is expected to grow to at least 30 billion yuan by the end of this year, Luo Lei, Deputy Secretary-General of China Automobile Dealers Association said recently.

The Chinese government invested 5 billion yuan in the "cash for clunkers" program last year, but as of May 31, only 1.7 billion yuan was given to the automobile consumers as subsidy and there was still 3.3 billon yuan left. Therefore, the country's automobile consumption in the next seven months will certainly be doubled.

Moreover, China has been giving more and more financial support for the automotive industry. It also improved the subsidy policy for vehicle purchasing in January this year, so the result will be positive by the end of this year, Luo explained.

On top of that, relevant sources from the MOC said in addition to promoting the automobile consumption, the Chinese government aims to accelerate the elimination of high-emission and heavy-polluting vehicles, and stimulate automobile consumption through the program.

By May 31, 2010, the country's relevant departments had handed out 1.7 billion yuan in subsidies that had resulted in the trade-in of 127,000 vehicles, boosting domestic automobile spending by 15 billion yuan.