China government: Buy a car now and we will give you money

Around 40 million residents of China depend on the auto industry for income and the government is giving tax benefits, rebates or cash to interested car buyers now.

By:Updated: Apr 15, 2020 11:13 AM
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China. We are pretty sure that the name will evoke many emotions, mostly negative, these days. The coronavirus pandemic started from Wuhan, China and spread throughout the world. Right now, most of the regions are in a state of lockdown while reports are emerging that China is limping back to normalcy. Like our country, even the Chinese market has been affected by a huge drop in automobile sales. From what we can glean from the China Association of Automobile Manufacturers (CAAM) statistics, car sales have gone down by 42 per cent till now. February, in fact, witnessed a major dip with only 3,10,000 cars sold. It is being said that more than 40 million people in China depend on the automobile sector (directly or indirectly) for their livelihood.

CAAM has said in a statement that the government should look at bumping sales as an immediate measure. CAAM also said that it is highly unlikely that China will recover from the losses, this year. The Chinese government has now started offering incentives to car buyers. In March 2020, the government announced that new energy vehicles (hybrid and electric) will have an extension in their tax benefits as well as subsidies by a good two years. As you may be aware, the Chinese market is bullish on electric vehicles and is, in fact, the largest consumer and exporter too. Not only this, but the state governments are also promoting a cash benefit on the new vehicles. Buyers stand to gain as much as a rebate of 9876 Yuan or Rs 1.06 lakh on purchase of new vehicles.

At present, the Indian scenario is such wherein the government has extended the lockdown till May 3. Auto sales are being done digitally and there are chances that the factories should also reopen after May 3. There is also ambiguity about the BS4 sales and FADA has appealed to the Supreme Court again, to extend the date of the sale. The last applicable BS4 vehicle sales date currently is April 24.

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