Automakers respond to govt's rural subsidy policy

Shanghai, March 2 (Gasgoo.com) Chinese automakers are responding positively to the central government's subsidy policies to rural customers for their purchase of low-price vehicles, reports the Shanghai Securities News.

To welcome the government policy, Dongfeng Motor said it is looking to expand its dealership network, and has begun to send market-survey teams to rural areas around cities such as Zhengzhou, Chengdu, Hangzhou, Jinan and Kunming.

The automaker's general manager, Zhu Fushou, told a seminar with dealers that the new policy offered a good opportunity to boost its light commercial vehicle (LCV) sales. 

Geely also said it would complete its expansion of 1,000 outlets in 1,000 counties by the end of June 2009. 500 of the stores will be newly set up.

Chery Auto planned to launch four models under its newly-released minivan brand Karry this year while Harbin HF Automobile Industry Group has begun to lengthen and widen its minivan models to make them more suitable for use in the rural areas.

The subsidy policy started to come into force from March 1, 2009. The government will earmark 5 billion yuan (US$732.3 million) in total to encourage vehicle owners in the countryside to buy new vehicles.

Farmers who trade in their lightweight vans or purchase minibuses with engines size of 1.3 liters or less would get up to 10% subsidies of the full price of a complete vehicle.