China Begins To Subsidize Auto Purchases To Revive Collapsing Sales

A China Automobile Dealer’s Association poll shows that dealers predict a drastic drop in sales of 50% to 80% this month, compared to February 2019. 70% of dealers have said they have seen “almost no customers” since the end of January. 

As China remains on lockdown due to the coronavirus, some Chinese cities are beginning to subsidize car purchases in attempt to revive an already ailing auto industry.

The Chinese city of Foshan is the first according to a Bloomberg report out Monday.

Consumers who trade in old models are going to be given 3,000 yuan (about $430 USD) of subsidies. Buyers of new vehicles without trade-ins will be entitled to 2,000 yuan.  This similar to the U.S. cash-for-clunkers during the great financial crisis.

China is one of, if not the largest markets for automobiles, capturing almost 35 percent of global sales in 2019.