Gasgoo.com (Shanghai June 24) - Shanghai Volkswagen and Shanghai General Motors have been implicated in illegal acquisition of government funds intended for approved energy-efficient vehicles. According to a statement made by the National Audit Office, which was later cited in a report appearing in the China Business News today, 5,570 vehicles Shanghai VW received 16.71 million yuan ($2.71m) in subsidies for failed to meet national standards. Shanghai GM, meanwhile, obtained 546,000 yuan ($88,324) worth of subsidies for 182 vehicles that fell short of government standards.
Shanghai VW released an official response to the allegations, shifting the blame to certain dealerships, which the joint venture said failed to understand the differences between its standards for new energy vehicles and those set by the government. These dealerships mistakenly assumed that vehicles receiving grants by the JV would also be eligible for government subsidies.
In an interview on the issue, an official from Shanghai GM stated that, since the manufacturer receives subsidies for over 800,000 vehicles already, it would not make sense for the joint venture to "cheat" the government out of subsidies for just over 100 vehicles.
Beginning in June 2010, the National Development and Reform Commission, Ministry of Industry and Information Technology and Ministry of Finance announced new legislation providing subsidies for energy-efficient passenger automobiles with engine displacements of less than 1.6 L. According to the legislation, gasoline or diesel-powered passenger automobiles that offered savings in fuel consumption rates of 20 percent or more would be eligible for subsidies of up to 3,000 yuan ($485.29) per vehicle. Shanghai VW, Shanghai GM, Beijing Hyundai and Chery were among the manufacturers whose vehicles were eligible for the subsidies.
