Gasgoo.com (Shanghai February 23) - According to a report appearing in the Securities Daily earlier this week, new legislation regarding the purchase of vehicles for government use will be released following the meetings of the Chinese People's Political Consultative Conference and National People's Congress this March. The legislation will reportedly establish stricter price standards than those introduced in 2011, which should help domestic own brand manufacturers develop in the government car market.
At the end of 2011, the Ministry of Industry and Information Technology issued standards reducing the maximum price of government cars from 250,000 yuan ($39,783) to 180,000 yuan ($28,643) and their maximum engine displacement from 2.0 L to 1.8 L. The new standards will reportedly reduce the maximum price for eligible government vehicles to 160,000 yuan ($25,461) while maintaining the same engine displacement, which should prove favorable to own brand manufacturers.
Several provincial and municipal governments, such as those of Gansu, Ningxia, Xinjiang, Hunan and Anhui, have taken measures to ensure that their existing fleets are "converted to own brand models." There have been many recommendations made by the government to promote the purchase of domestic own brand vehicles for use as government cars, but none of them have been officially made into law.
Own brand models accounted for only 20 percent of vehicles purchased for government use in the first half of 2011.
