Jilin subsidizes farmer buying FAW mini vehicle

Shanghai, March 3 (Gasgoo.com) As China rolls out its 5-billion-yuan ($732 million) stimulus package for carmakers, its northeastern Jilin province has promised 100 million yuan as subsidies for farmers who buy small vehicles made by a local FAW company, xinhuanet.com said today.

In Jilin city of the province, China's largest automobile company FAW Group counts on farmers to buy more than 70% of its Jiabao brand mini vehicles made by its subsidiary FAW Jilin Auto. As the production base of the 0.97L to 1.3L Jiabao small vehicles, Jilin city will benefit from central government's subsidies to farmers to replace their three-wheel vehicles or outdated trucks with small, 1.3L-minus vehicles.

Before the central government's money trickles down, Jilin province, where FAW Group is based, has pledged 100 million yuan to subsidize 15% of the price of each FAW-made commercial vehicle for sale in the province's rural areas from February 20 to the end of November. FAW's Jiabao brand, with an established sales and after-sales network in the Jilin city's rural communities, immediately benefited.

Jiabao's February sales in Jilin province soared to 1,411 units, up more than 1,000% from 123 units of a year earlier. Surging sales have set long-idle production capacity into motion. The Jiabao factory produced 2,488 units in January, and 5,300 in February. With the national bailout package coming into effect, FAW Jilin Auto is planning to make 7,000 Jiabao vehicles in March.

The Jiabao vehicle, priced from 25,800 to 48,800 yuan, targets farmers who use small commercial cars extensively for personal and business purposes. With the government's 15% price subsidy and tax-breaks, FAW Jilin Auto's mini vehicle sales are expected to grow by up to 15% countrywide this year.