Geely expects to benefit more from gov't subsidies

Shanghai, December 31 (Gasgoo.com) Besides Beijing's strong support for Geely's Volvo acquisition, Geely also expects to get more benefits from the Chinese government's subsidies policy, which will continue in 2010, Reuters reported today.

In early December, China said it would subsidize sales of "green vehicles" in some cities as part of its efforts to promote environmentally friendly vehicles to cut fuel emissions and boost domestic consumption. The government will also give rebates to Chinese private car buyers for the first time.

The global auto industry has changed dramatically during the past year's financial crisis. Global carmakers such as Volkswagen and General Motors are stepping up their presence in China, which has overtaken the United States as the world's largest auto market this year.

Chinese carmakers such as Geely and Beijing Auto (BAIC) are jumping at the chance to pursue overseas acquisitions. BAIC has paid $200 million to buy technology from GM's Swedish unit Saab and will use the Saab tech to develop self-branded vehicles.

The government will also continue to subsidize rural buyers of low-emission vehicles and those who trade in their polluting cars for cleaner ones, as part of the incentives to boost the auto market.