(ATF) The Chinese government has nominated automobile sales as "main force" to be promoted for consumer purchases, and provincial and national policies are being tailored to that effect.
The motor industry’s importance to China was underlined by its largest carmaker, Geely Autiomobile’s announcement it would seek a yuan-denominated listing in Shanghai. Its shares are already traded on the Hong Kong Stock Exchange, where it has a valuation of HK$110 billion ($14bn).
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According to the latest data from the China Association of Automobile Manufacturers, in May this year, automobile production rose by 4% while sales increased by 5.9% month-on-month. Year-on-year production was up by 18% and sales up by 14.5%.
The production and sales of passenger cars increased by 4.5% and 8.9% respectively in May, and by 11.2% and 7.0% respectively year-on-year. The growth rate has changed from negative to positive. Production and sales of commercial vehicles also showed a substantial increase year-on-year.
Industry experts said at the beginning of this year that central and local governments had continuously introduced policy measures to stabilise and promote automobile sales to help the auto market recover. Part of the government's new infrastructure spending will be allocated to a network of power stations for electric cars.
The main push is for electric vehicles, with government subsidies of 20,000 yuan for electric vehicles and 10,000 yuan for hybrids. Manufacturers are also adding new features such as air filters that can – allegedly – stop virus and pollution particles.
Beijing recently announced that it will further promote the sale of commodities such as automobiles and implement a plan to try to reduce 'obsolete' motor vehicles that pollute the environment.
At the same time, it adopts forms such as a centralised e-commerce platform and online signing of car purchase customers outside Beijing to simplify the relocation transaction process for used cars.
Shaanxi Province has also recently proposed giving support to households without cars so families can purchase their first domestic vehicle, if it is electric. And officials want to encourage cities to study auto support policies for rural areas and organise promotional activities for citizens in rural areas. They want leading car sales companies to develop new offline and online formats and models.
Chongqing, Guangdong, Hubei, Jiangxi, Sichuan and other places have also recently introduced policies to boost consumption and promote market prosperity, in a bid to push car sales and expands e-commerce purchases.
Su Hui, executive deputy chairman of the China Automobile Dealers Association, told Xiaokang News the promotion of favourable policies for car sales had ushered in a new round of consumer enthusiasm.
Geely Automobile would listing on Shanghai’s technology-heavy STAR exchange because it is as an enterprise with many independent technologies.
"Listing A shares and Hong Kong shares at the same time is conducive to making better use of the resources of the grafted international and domestic markets, helping Geely's technological transformation and long-term development in the future," Geely Auto said.
Geely and its sister company Volvo Cars plan to merge and list in Hong Kong and possibly Stockholm, Reuters reported.
- Additional reporting by Nadeem Xu