Shanghai, December 31 (Gasgoo.com) China is set to lift the ratio of domestic brands to more than 50% in procuring cars for its government officials, Xinhua News reported yesterday. This move is part of the policy to promote Chinese auto brands.
The Chinese government's 2010 car-shopping bill is likely to top 100 billion yuan ($14.7 billion), a huge cake for Chinese and foreign car brands alike. Regulations are being drafted to specify the standards and prices of home-brand cars for officials.
Under the new rules, common vehicles of all government departments should have an engine size of up to 1.8 liters and a price below 160,000 yuan, compared with the current level (in place since 1994) of 2.0 liters and 250,000 yuan.
Ministers and provincial governors can have cars with an engine size of up to 3.0 liters and a price below 450,000 yuan. The car for a vice minister should be priced below 350,000 yuan, according to the 1994 regulations.
In 2008, China's spending for official cars reached 80 billion yuan, accounting for 14% of the total expenses of government purchase, and the figure may jump to 100 billion yuan next year. Official-car purchase now contributes 8% to the total value of car sales in China.
In June, German luxury car maker BMW made the list of the Chinese government's car purchase for officials, a lucrative market segment ever dominated by Audi and Mercedes-Benz. Of the 38 automakers on the list, 21 are Chinese brands, such as Roewe, MG and BYD.
Chinese President Hu Jintao rode FAW's Hongqi (Red Flag) HQE limo reviewing the military parade on October 1 in Beijing's celebration of the 60th anniversary of New China. This event has been deemed as a great promotion of Chinese auto brands.
